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ANew Housing Policy for Labour 


Chapter 

1. Where Labour Went Wrong 1 
2. The Challenge to Labour 4 
3. A Home for Everyone 8 
4. A Housing Programme for Labour 12 
5. A Better Deal for Renters 19 
6. Sensible help to Home Owners 24 
7. Financial Fairness for All 29 
8. Summary 34 
David Griffiths worked for six years as the Labour Party's housing research 
officer. He was a founder member of the Labour Housing Group and its Chair in 
1983/84. He now works for the London Borough of Haringey. 

Chris Holmes works as Director of CHAR, the campaign for single homeless 
people. He is a member of the Labour Housing Group Executive Committee and 
was Chair of LHG from 1981-83. He is a eo-opted member of the Labour Party 
Joint Policy Committee on Housing. 

Both contributed chapters to LHG's book "Right to a Home" and have written 
widely on housing issues. 

Front cover photo: Labour Party Photograph Library 

This pamphlet like all publications of the Fabian Society represents not the 
collective view of the Society but only the views of the individuals who prepared 
it. The responsibility of the Society is limited to approving the publications it 

· issues as worthy for consideration within the labour movement. 

July 1_2B.5 ~ 
ISB 0 7163 0505 4_) 
ISSN 0307 7523 


-Typeset by Lithosphere Printing Co-operative Ltd (TU) 01-8371174 
Printed by Blackrose Press (TU) 01-251 3043 
Published by the Fabian Society, 11 Dartmouth Street, London SW1H 9BN 


1. Where Labour Went Wrong 
For generations ofsocialists, the provision ofdecent housing for working-
class people has been a major aim. The scourges of overcrowding, unfit 
slums and Rachmanite landlords have been seen as an affront to human 
dignity, and a scandal within a relatively affluent society. When the 
Labour Party gained control of municipal authorities, the task of replacing 
the slums and building new homes was a major priority. The Party's 
manifestos have consistently promised a massive housing programme to 
eradicate the housing shortage. 

Yet over the last two decades, housing slid 
steadily down Labour's agenda. Apart The politics of housing 
from the set-piece debates over Clay After June 1983, however, the status of 
Cross in the early 1970s, it engaged little of housing as an issue changed rather abrupt-
the movement's political passion. In-ly. Politicians as different as Roy Hatterscreasingly 
it became the preserve of ley and Stan Newens identified Labour's 
elected Labour councillors on the one housing policy as an electoral liability 
hand , and a small band of housing policy which had to change. Peter Kellner 
specialists on the other. The pre-argued in the New Statesman (29.7.83) 
occupation of the council members has that he would "not be at all surprised if 
been the day-to-day demands of building housing policy becomes one of the most 
and running their housing stock. And as important ideological issues for Labour 
the size of their municipal housing over the next two or three years". 
empires has grown, they have tended to It was, of course, the perceived elector-
see housing issues primarily from the pers-al cost of Labour's position on council 
pective of socially responsible, but large house sales which led to this rediscovery of 
and bureaucratic, landlords. housing as politics, not just management 

The development of housing policy and policy. True, sales had also been an 

within the Labour Party meanwhile be-issue in 1979, but then the Tories were 

came dominated by housing experts who only promising council tenants the right to 

could fairly be described as Fabian, be-buy their homes. By 1983 the 'right to buy' 

cause of their belief in the political power had been on the statute book for nearly 

of rational argument, their concern with three years and Labour was pledged to 

distributional issues and their attention to repeal it. The result was that, as the: 

administrative detail. Through their pub-Labour Coordinating Committee broad 

lications, and their assiduous contribution sheet After the Landslide put it, "we cam· 

to the work of the Labour Party NEC's across as merely punitive to ordinary pec 

Housing Sub-Committee, established in ple wanting to better themselves". 

1974, they developed a body of detailed In housing policy terms, however, 

and reasonably coherent Party housing Labour's objections to the Tory 'right to 

policy, rooted in a thorough analysis of the buy' were and are, in themselves, ex-

housing system and most fully expressed tremely defensible. In the short term most 

in the housing chapter of Labour's Prog-of the dwellings sold would not have been 

ramme 1982. available for re-letting (since the tenants 

I 



would have continued to live there) , but 
over the years the policy of sales undoubtedly 
results in a reduction in the 
supply of re-lets and a worse shortage of 
rented housing. Yet the Tories have 
forced councils to sell, irrespective of the 
local need or demand for rented housing. 
They have done so on financial terms discounts 
from market value of 32 to 50 
percent, since raised to 60 per cent-which 
favour the buyer at the expense of the rest 
of the community, and fail by far to 
finance the replacement of the rented 
housing lost. Yet even on such generous 
terms, it is inevitably the better-off 
tenants who buy and the better quality 
housing which is sold -suburban houses 
with gardens, not inner city fiats. Far from 
breaking down the 'municipal ghettos' of 
Tory rhetoric -and, sadly, of some inner 
city reality -indiscriminate sales under the 
'right to buy' are thus strongly reinforcing 
the social and geographical polarisation 
between the housing tenures which 
already disfigures our society. 

This selective and stigmatising policy 
was born of a Tory dogma that everyone 
ought to be a home-owner. Labour did not 
respond, at least at the level of national 
policy, with an equal and opposite dogma 
that everyone ought to rent. Instead it 
argued that sales policies should be locally 
determined in the light of local needs, and 
in any event should be at full market value 
to preserve equity and provide for replacement. 


This position was eminently rational and 
utterly ignored. Come the election 
virtually everyone believed that Labour 
was opposed to all sales in all circumstances. 
By extension, moreover, Labour 
was against home ownership as such -notwithstanding 
stated Party policies and 
Labour Governments' numerous practical 
initiatives in its support. It was a rout for 
'Fabian' faith in the power of argument. 
Political imagery and practical experience 
-the Tories' appropriation of the theme of 
'freedom', and tenants' first hand experience 
of Labour as a landlord-had proved 

vastly more potent than the most rational 
of national policy statements. 

Thus the Tories won a renewed mandate 
for pursuing their radical housing 
programme. While council house sales 
were the populist centrepiece, the programme 
itself is far wider. It has included 
huge cuts in public sector investment, in 
both new building and rehabilitation; the 
abolition of minimum standards for public 
housing; and rent increases well in excess 
of the growth of prices and earnings. A 
determined assault has been made on public 
sector provision, and housing has suffered 
some three-quarters of the total net 
reductions in public spending achieved by 
the Government. 

To see how the Tories were able to gain 
the initiative in this way, and indeed to 
carry through their programme with so 
little resistance, we need to glance back 
briefly at the development ofBritain's-or 
more accurately England's-housing system. 


The changing role of council 
housing 

As a national programme, council housing 
began in 1918. At that time 90 per cent of 
housholds rented from private landlords, 
and it was in response to popular discontent 
with landlordism, together with wider 
social expectations of 'winning the peace', 
that subsidised council housing was born. 
As the immediate social pressures receded, 
so did the generosity of support for 
public housing, and even after the Second 
World War private renting was still firmly 
the majority form of tenure, housing some 
60 per cent of households in 194 7. 

Bevan's post-war drive for high quality 
council housing, so often revered in 
Labour housing debates as a golden age, 
thus took place in the context of a housing 
system radically different from today's. 
The private rented sector has now dwindled 
to little more than 10 per cent of the 
housing stock, and while council housing 
has grown (until the Thatcher years) to 

2 



house nearly 30 per cent of the population, 
home ownership has become the 
majority tenure. 

This has been a social change of remarkable 
rapidity, and the implications for 
perceptions of different tenures -the 
heart of the housing politics of 1979 and 
1983-are profound. To engage in some 
crude but not wildly inaccurate generalisation, 
in those formative Bevanite years 
working class households rented. The 
issue was whether they rented from a private 
or a public landlord, and the latter 
was generally a great improvement on the 
former, in terms both of housing quality 
and effective security of tenure. 

For millions of households, indeed, 
council housing broke the link between 
low income and grossly inadequate housing. 
They had reason to be grateful for the 
council housing programme -and many 
Labour politicians expected just such gratitude. 
Within the rented sector, moreover, 
council tenants were typically skilled 
manual workers, while the private sector 
continued to house the lowest income 
groups.

Today's scene is very different. There is 
no longer any easy identification between 
working class housing and rented housing. 
Instead opportunities for home ownership, 
widened by post-war prosperity 
and specific legislative encouragements 
(sucp as Labour's 1967 option mortgage 
scheme), have been taken up enthusiastically, 
and a majority of skilled and semiskilled 
manual as well as white collar 
workers now own their home. The key 
comparisons for council housing are thus 
no longer with the withering private 
rented sector, but with owner-occupation. 
And here it is not gratitude but its paternalistic 
obverse which is crucial. By the 1970s 
council housing had become firmly label-
led, and not without reason, as the housing 
sector which offered little or no choice 
-over where you lived, how many rooms 
you had, what colour you could paint the 
front door. Home ownership contrasted in 
all these respects as a paradise of true 

freedom . And for the established council 
tenant, subsidised council house sales 
were a very attractive means of gettingthere. 

As more better-off tenants moved in to 
owner occupation, at the other end of the 
scale council housing increasingly took 
over from the private rented sector its 
function as the 'tenure of last resort'. In 
1969 the Cullingworth Report advocated 
changes in council allocation policies to 
remove obstacles to access for households 
in the most severe need. The 1972 Tory 
Housing Finance Act removed some of 
the financial barriers which had excluded 
the poorest people from council housing, 
by introducing the new national rent rebate 
scheme and the 1977 Housing(Homeless Persons) Act for the first time 
gave local housing authorities a statutory 
responsibility to secure accommodation 
for homeless people in "priority need". 

Thus the social location of council housing 
has significantly shifted towards the 
lowest income groups and those with no 
other housing options. Table 1 shows the 
changes in the proportion of households 
on supplementary benefit in different 
tenures between 1967 and 1982. The 
marked shift is the fall in the share of the 
private rented sector (associated with its 
steady decline) and the increase in the 
proportion in local authority housing whereas 
the proportion in owner-
occupied homes has remained almost constant, 
despite the major growth of the sector 
over that period. 

TABLE 1 
Households claiming Supplementary 


Benefit by tenure (% ) 
Owner-Council Private 
1967 
Occupation17 
renting 
45 
renting 
38 
Total 
100 
1982 19 62 18 99 

Even before 1979 council housing was 
thus clearly threatened by what housing 
analysts have christened 'residualisation' 

3 



-a slow decline into a stigmatised second-
best sector for the 'needy' , an ironic echo 
of 'allocation according to need'. Tory 
policies on sales, house building and rents 
have greatly accelerated this process. But 
it has also been reinforced by longstanding 
and deep inequities in housing 
finance. 

Council housing has always received 
state subsidies from national taxation and 
local rates, which have been visibly recorded 
as items of public expenditure. But 
home ownership too has been heavily subsidised, 
through tax concessions which do 
not feature as public spending. Mortgage 
interest payments attract tax relief, yet 
there is no offsetting tax on the income in 
kind derived from ownership -essentially, 
the avoidance of rent. Capital gains on 
housing have also gone untaxed, despite a 
long-run tendency for house prices to rise 
ahead of general inflation. In recent years, 
despite the substantially higher average 
incomes of owners, and the 'featherbedded' 
image of the council tenant, these 
tax concessions have come to dwarf the 
explicit subsidies to public tenants. 

Thus while the costs of getting into 
home ownership have remained substantial 
-largely because of inflation and professional 
restrictive practices -for those 
who can surmount the initial hurdles the 
long-run benefits are usually substantial, 

especially for those with larger mortgages 
and in higher tax brackets. In their 
advocacy of council house sales, as well as 
contrasting the freedoms of ownership 
with municipal serfdom, the Tories have 
not been slow to emphasise the owner's 
opportunity to accumulate wealth and 
'pass something on to the children'. For all 
the Party's municipalist rhetoric and egalitarian 
sentiment, Labour Governments 
have never challenged these financial disparities. 
So we have had the worst of both 
worlds: perceived as opposed to home 
ownership, while in practice sustaining the 
discreet fiscal arrangements which discriminate 
in its favour at tenants' expense.

At root, therefore, the policy weaknesses 
and the political failures are inextricably 
linked. Although the argumentsagainst council houses sales are absolutelyvalid -taken in isolation -they are undermined 
within an overall housing system 
which is grossly biased in favour of home 
owners. The failure to tackle this critical 
policy contradiction left the Labour Party 
vulnerable to the Tories' political assault. 
The success of the 'right to buy' was only 
possible because Labour's position was 
flawed as well as defensive. A new 
approach requires not just better campaigning, 
but a deeper analysis and radically 
changed policies. 

2. The Challenge to Labour 
The challenge to the Labour Party now is to develop a response which is 
both principled and popular to the changed housing conditions and social 
realities of the 1980s. Principled in advancing Labour's basic socialist 
objectives within the housing field; yet capable of commanding popular 
support within today's housing politics. 

But what are Labour's basic housing afford' conceals as much as it reveals. 
objectives? The time-worn demand for Whose rights to housing are being
'decent home for all at a price they can asserted? -every adult member of the 


4 



community, as we will argue, or families 
and other 'deserving' households, a common 
interpretation in· practice? How decent 
is decent, when standards and aspirations 
tend to rise through time, yet today' 
new housing inevitably lasts many years 
into the future? What is a fair payment for 
housing, given that costs not met directly 
by the consumer must be recouped more 
widely through national or local taxation? 

Good answers to these questions can 
only be found by respecting the dual nature 
of housing. It is a major and long-
lasting element of the nation's infrastructure, 
the quality of which has a very significant 
impact on people's chances in life. 
This demands that Labour's egalitarian 
and collectivist values are brought to bear 
-we need a commitment to real equality 
in housing, and an acceptance that the 
state of the nation's housing is a matter of 
public responsibility. 

Yet a home is also something very personal, 
standing at the heart of people's 
lives -perhaps to a growing extent in the 
years ahead, as both leisure and work 
promise to become more home-based and 
over which people therefore expect 
substantial personal control. This personal 
dimension has too often been neglected 
in Labour's rhetoric and practice of publichousing, based on misplaced analogies 
with the universal and collective character 
of health and education provision. So it is 
equally important that we approach housing 
policy in a strongly libertarian spirit, 
seeking to advance individual rightsthroughout the housing system. 

Housing policy thus embodies particularly 
sharply some of the tensions between 
democratic socialist values. This makes it 
difficult and challenging; but perhaps also 
means that housing debates can reach 
beyond their sometimes technical terms of 
reference to illuminate wider political debates. 


In sketching Labour's broad objectives 
in housing, no reference has been made to 
housing tenure. Whether people rent or 
buy their homes in fact raises no issue of 

principle for socialists. Clause IV of the 
Party Constitution encapsulates traditional 
ocialist objectives in advocating common 
ownership of "the means of production, 
distribution and exchange" -and 
owner-occupied housing i none of these. 

Debates over tenure 

Yet when we turn from matters of principle 
to practical politics, we find the housing 
debate of the 1980s is, as the previous 
chapter showed , dominated by tenure home 
ownership versus public rented 
housing. It is a striking fact that at the 1983 
election, while housing as an issue had 
little political salience according to the 
polling evidence, housing tenure had 
emerged as a major indicator of people's 
voting intentions -probably the best single 
indicator now available. We believe 
that Labour must now seek to move the 
housing debate beyond a preoccupation 
with tenure, and to rebuild concern with 
housing conditions, costs and rights. 

This cannot, of course, be achieved by a 
lofty detachment from present debates: 
we have to start from where we are. Some 
socialist responses to the present politics 
of tenure are, however, very inadequate. 

There are those within the labour movement 
who argue that the only realistic option 
is to accept the preference of most 
people to own their homes and to revise 
the Party's policies accordingly. The most 
recent version of this argument has been 
advanced by Mark Cowling and Sue 
Smith, who espouse the aim of universal 
owner-occupation. They suggest that the 
route towards this should include granting 
deposits to people on council waiting lists, 
according to their need; making full mortgage 
repayments -capital as well as interest-
eligible for Supplementary Benefit 
from the DHSS; extending Housing Benefit 
to low income owner-occupiers; and 
retaining the current large discounts to 
council tenants buying their existingdwelling (M. Cowling & S. Smith, "How 
to avert Labour's great housing disaster" , 
The Guardian, 9 November, 1984). 

5 



The central flaw in this argument is its 
fetishism of owner-occupation as inherently 
preferable. Whilst recognising 
the financial privileges which have 
favoured home owners, Cowling and 
Smith regard the introduction of measures 
to work towards equality of tenure -which 
we will advocate -as a "clear recipe for 
electoral disaster". Yet the evidence suggests 
that for many people renting has 
considerable advantages, especially at 
some stages of the life cycle, provided its 
quality, cost and availability are comparable 
to ownership. Even the Cowling and 
Smith proposals would leave significant 
numbers of households in rented accommodation 
still more disadvantaged and 
stigmatised as 'welfare housing' than at 
present.

In financial terms, policies for expanding 
owner-occupation still further are 
wasteful in the extreme. As a long-term 
investment collectively owned and produced, 
public housing is a very cost-
effective use of resources, in comparison 
to subsidies to owner-occupiers. Whilst 
the Cowling and Smith proposals would at 
least compensate for the acutely inequitable 
character of mortgage tax relief -byextending discounts and reduced costs to 
people on Supplementary Benefit and 
Housing Benefit to low income owners the 
greAtest tax concessions would still be 
received by the richest people with the 
largest mortgages. 

This populist response to the Tory 'right 
to buy' would be a grossly inadequate response 
for Labour. It would be irrelevant 
to tackling a wide range of the housing 
problems experienced by owner-
occupiers and a betrayal of all those who 
would still prefer or need to rent. And its 
electoral benefits would be dubious. If 
people want Tory policies, why not simply 
vote Tory? 

A totally opposite position is adopted

by those who advocate a return to 'class 

issues' in housing policy. The strongest 

statement of this view is in the pamphlet 

Class Politics (B. Fine, L. Hollis, M. 

Mayo, A. Weir & E. Wilson, Class Politics 
, Central Books 1984). This attacks the 
objective of equity between different 
forms of tenure espoused by the "newer 
left" as misguided and impracticable. 
(Their comments on the "newer left" and 
housing proposals are directed at "To Buy 
or not to Buy", D. Griffiths & C. Holmes, 
Marxism Today , May 1984). The authors' 
argument is that the real causes of the 
crisis are in the "whole structure of housing 
provision", including the monopoly 
concentration, the backward technology 
and the chronic instability of the private 
house building industry. To tackle this 
they advocate "radical measures", including 
the nationalisation of land and the 
building industry. 

In their emphasis on the imperative 
need for a major programme of house 
building, the authors of Class Politics are 
absolutely correct (although they are 
erecting 'men of straw' in their allegation 
that the "newer left" are in disagreement 
on this issue). Whilst some of their specific 
suggestions are questionable -particularly 
the proposal for nationalisation of the 
building industry, since most of the major 
companies sub-contract the construction 
work itself-new forms of intervention are 
urgently required to secure the provision 
of more new homes of satisfactory quality 
in the areas where they are needed. 

The critical weakness of the argument is 
what it omits. They allege, quite inaccurately, 
that the "newer left" accept owner 
occupation as "best" and "natural". Yet 
by refusing to propose any changes to the 
current tax privileges of owner-occupiers, 
they are implicitly supporting the fetishism 
of owner-occupation. By totally neglecting 
the lack of adequate statutory 
rights for people in poor housing or without 
a home, they condone the class inequalities 
experienced. And their uncritical 
approach to the role of the State fails to 
analyse the reasons why many working 
class people -and most especially women 
and black people -experience public 
housing agencies as oppressive. The 

6 



whole style of argument suggests a preoccupation 
with preserving socialist purity 
by the repetition of simplistic slogans, 
rather than a serious examination of the 
causes of housing poverty, injustice and 
exploitation. 

Astrategy of choice 

Thus Labour is invited to commit itself to 
an uncritical endorsement either of home 
ownership or of traditionally organised 
public housing. Our own view is that these 
should be options for individuals, not for 
policymakers. Labour should adopt as a 
central objective the widest possible extension 
of choice -underpinned by an 
ambitious programme to achieve justice 
between different tenures , to ensure that 
the choice is a real one. 

We have already argued that there can 
be no principled socialist objection to such 
an approach. The political argument in its 
favour is that Labour must contest the 
ground captured by the Tories' own divisive 
but persuasive appeal to choice and 
individuality in housing. There is some 
evidence that the strategy can achieve 
this: a recent MORI poll for the Observer 
found almost as many respondents believing 
councils should provide housing for 
anyone who wants it as believed it should 
be confined to those in need ( 45 per cent to 
53 per cent). 

Practically, too, choice and freedom of 
movement between tenures can respond 
far better to households' changing needs 
and preferences than the present rigid binary 
system. Home ownership may well be 
the first preference of most able-bodied 
two-adult households. But for manyothers, including the young, the old, single 
women with children, access to good 
rented housing when and where they need 
it can be very important. 

In placing such emphasis on choice, we 
could seem to share common ground with 
the 'social market' approach espoused bythe SDP, or even with positions adopted 
by the 'New Right'. In the social market, 
however, the basis for choice is economic 

demand -in turn determined by household 
income and wealth. Given what we 
have said about the importance of the personal 
in housing, and the vast diversity of 
the housing stock, we accept that markets 
can register essential information about 
consumer preferences. Once again 
tempering liberty with equality, however, 
we believe it is vital, even if difficult, to 
base choice in housing on a platform of 
statutory rights to housing available to the 
whole population, irrespective of the economic 
demand they can exercise. This is 
the theme of the next chapter. 

The 'social market' may still contain 
public sector suppliers. The New Right, in 
contast, s:.upplement economic individualism 
with a central concern to 'roll back the 
state'. The real problem, however, is not 
too much state intervention, but misguided 
and regressive forms of intervention. 


As landlords local authorities have interfered 
too intrusively in the lives of 
many tenants, limiting choices over where 
people live and how their homes are run. 
And tenants have been denied the statutory 
rights of access to satisfactory housing, 
enforceable standards and a say in 
control which could have given protection 
against their weak economic position. Yet 
at the same time there has been too little 
public control over the production process. 
The historical reality is that publichousing has largely been constructed on 
terms dictated by the dominant influences 
of private capital. The private ownership 
of land, the private ownership of the construction 
industry, the private control of 
the money market have decisively shaped 
-and mostly for the worse -the character 
and quality of 'public' housing. The systems-
built estates of the 1960s are simply 
the most obvious example: planned and 
marketed by the major building contractors 
to strengthen their profitable domination 
of an expanding market. 

Conversely, the State has played a major 
role in the growth of home ownership. 
The tax privileges already outlined have 

7 



played a crucial part in making it attractive 
for those who have the chance to buy. The 
inequalities between sectors have been 
made still worse by the double standards 
which have imposed rigid centralised controls 
over public housing investment, yet 
allowed private institutions unfettered 
freedom to finance and build as many 
homes as the market demands. 

While home-owners have gained from 
these and other financial benefits, however, 
within the owner-occupied sector there 
is acute frustration at the fluctuations in 
the market, the difficulties of buying and 
selling, the heavy costs of mortgage payments 
in the early years, and the serious 
problems of disrepair faced by many 
elderly owners. Yet there are no effective 

forms of state assistance in tackling these 
real difficulties. 

Thus the challenge to Labour is not to 
roll back but to reshape the role of the 
State, in a way which respects both the 
social and the personal aspects of housing. 
At present it acts as a paternalist in the 
public sector, while simultaneously undermining 
that sector through the bias of its 
wider financial policies. The State should 
neither intrude into, nor seek to distort, 
people's individual choices. It should instead 
be a resource and support for households 
to draw on as they pursue, in 
whichever tenure, their housing careers. 
The political task is to show how new 
forms of intervention can both reduce inequality 
and widen choice. 

3. AHome for Everyone 
Owner-occupied housing is available on demand. Those with sufficient 
capital and/or annual income can buy homes on the private market, 
without queuing or needing to justify what they want. The size and 
quality of what they can obtain is, of course, determined by the extent of 
their wealth. 

In principle, private rented housing is and only 12 per cent in 1981 (only 10 persimilarly available. Two generations or so cent if the housing association share is 
ago this was actually what happened. omitted). This still represents a substan-
Tenants could find a house or rooms to tial number of tenancies, although a quite 
rent from a private landlord. Frequently large number of these are in tied accomfamilies 
did move to larger or smaller modation, and there are a lot of lettings 
accommodation as their income fluctu-still taking place every year. However, 
ated. It would be wrong to romanticise many of these take place-through an inforthis 
experience. Most privately rented mal grape-vine or depend on 'key money', 
housing was lacking basic amenities, over-putting down deposits or being required to 
crowding was acute, repairs were com-meet high rents. What remains of the primonly 
neglected by the landlords. The vate rented sector is characterised by its 
fact was though that housing was avail-poor quality, bad management and grow-
able, at a price, more or less on demand. ing lack of security (as more landlords 
Today, of course, the state of the pri-exploit the loopholes in the Rent Acts). 
vately rented sector is very different. Its Access to public housing is determined 
share of the housing stock has fallen from differently. It has been developed in con90 
per cent in 1914 to 45 per cent in 1945 ditions of severe housing shortage, but 

8 



with a commitment to breaking the link 
between poverty and inadequate housing. 
The use of market rents to bring demand 
and supply into balance has therefore 
been eschewed, and local authorities have 
been forced to devise systems for deciding 
priorities between different applicants . In 
practice, this has meant maintaining a 
housing waiting list and developing allocations 
procedures which tend to give priority 
to the needs of families with children, 
especially in overcrowded accommodation, 
to elderly people and to applicants 
with long local residence, reflecting 
deeply-held assumptions about who is 'deserving'. 
Little importance has been given 
to the needs of other groups, such as single 
people of working age. 

Alongside this system of allocation, 
there are some circumstances in which local 
councils have a statutory duty to provide 
accommodation. These are to ensure that 
homes are available for people displaced 
by clearance or redevelopment, or by 
eviction from agricultural tied cottages; 
and to secure accommodation for applicants 
defined as being in "priority need" 
under the 1977 Housing (Homeless Persons) 
Act. These include those made 
homeless as a result of emergency, homeless 
families with dependent children and 
pregnant women and other homeless people 
considered to be vulnerable -for example, 
because of old age, mental or 
physical illness or handicap. Once again 
the overwhelming majority of homeless 
single people and childless couples are excluded. 


Households displaced by council action 
do enjoy a clear right to re-housing. Since 
the council wants to obtain possession of 
the property, there is a practical as well as 
a legal obligation to satisfy reasonable expectations 
over the type and location of 
the housing that is wanted. The position of 
other applicants is considerably weaker. 
Those registering on waiting lists can 
usually indicate areas in which they would 
prefer to live, but it is the council which 
decides what is offered -if anything. If 

applicants refuse an offer of re-housing 
they risk having to wait a long time for 
another -and may never get one. The 
extent of choice for waiting list applicants 
is normally very limited indeed. 

Those homeless applicants in "priority 
need" do have a legal right to housing, but 
in practice have even less choice. The 
treatment of homeless people is still characterised 
more by the ethos and values of 
the Poor Law than the entitlement to social 
rights of a civilised democracy. The 
legislation effectively distinguishes the 
'deserving' from the 'undeserving'. There 
are no controls over the standard of 
accommodation that is offered. The "intentional 
homelessness" clauses reflect 
punitive attitudes towards those who are 
held to have been responsible for their 
homelessness. And there are no effective 
rights of enforcement for homeless applicants. 


These flaws in the legislation are shaped 
by, and also reinforce, the damaging 
myths and stereotypes about homeless 
people, and the perceptions of the 
apparently competing claims of applicants 
on council waiting lists and households 
who present themselves to local authorities 
as homeless. The assumption is that 
having to house homeless people is a regrettable 
necessity to comply with the 
council's statutory obligations (although 
teachers would not think of complaining 
that they have a class full of children with a 
legal right to be at school!). The typical 
image of homeless applicants is almost always 
negative: "queue jumpers", "newcomers", 
"immigrants" , "feckless". In 
contrast, the claims of waiting list applicants 
are described in the language of law 
abiding, deserving legitimacy: "local residents", 
in "housing need", patiently 
"waiting their turn". 

Yet in reality these distinctions are nonsense. 
The people on housing waiting lists 
and those who present themselves as 
homeless are more and more frequently 
the same people. Growing proportions of 
those on waiting lists are people forced to 

9 



live temporarily with friends or relatives 
because they cannot obtain a place of their 
own. 

Indeed the whole concept of a 'waiting 
list' is itself becoming an anachronism. It 
implies that there is somewhere to wait. 
And, historically, it was the private landlords 
who provided the waiting room. It 
was often run-down, overcrowded and 
without amenities, but it did provide a 
place where people could live unless or 
until they qualified for re-housing by the 
council. 

The virtual disappearance of new lettings, 
at least in protected private tenancies, 
has made that option impracticable 
for most people. There is now a massive 
hole in housing policy and provision. At 
some stage in their lives very large numbers 
of people who cannot afford (and 
may not wish) to buy need somewhere to 
live urgently. Yet there is no route to immediate 
permanent housing -for young 
people leaving home, for partners wishing 
to live together or to leave relationships 
that have broken down, for patients coming 
out of hospital, for offenders being 
discharged from prison and people in a 
variety of other similar circumstances. 

It is only in the network of hostels and 
bed and breakfast lodging houses that a 
grotesque parody of the home ownership 
housing market is to be found. At least 
until now, unemployed people claiming 
Supplementary Benefit have had a right to 
the cost of board and lodging in these 
forms of temporary shelter. In its own 
way, it has been available on demand. But 
since there is no rent control, no security 
of tenure and no controls over standards, 
the owners of these commercial establishments 
are able to make vast profits at public 
expense by letting squalid, overcrowded 
and often unsafe accommodation 
to homeless people. The irony is that 
it would be not only better, but cheaper, to 
allow local councils and housing associations 
to provide proper self-contained flats 
thar. to pay the cost of board and lodging 
to commercial landlords. The response of 

the Government now, however, is to bring 
in new limits that take away even this fragile 
right -and either force people into 
still more sub-standard temporary accommodation 
or literally put them on the 
streets. 

Aright to rent 

The way forward must be through a radically 
new approach which aims to establish 
a statutory right to housing for all 
members of the community. In the present 
situation, this means that we have to 
establish an effective right to rent for all 
households needing or preferring this 
form of tenure. 

The call for a 'right to rent' is an unsettling 
one-but only because it challenges a 
deeply embedded double standard. Traditionally 
socialists have argued that public 
housing must be rationed according to 
need, while accepting with little question 
the right of owner-occupiers to acquire as 
much housing as they can afford at any 
location where it is available. This might 
make some sense if public housing were 
heavily subsidised whilst owner-occupied 
housing were not -but we are now in 
virtually the reverse position. Overcoming 
this double standard by offering rented 
housing too on demand must be an essential 
part of a strategy for tenure justice. 
But, as we argued earlier, 'demand' must 
have a basis of statutory rights, not just 
purchasing power, if housing outcomes 
are not simply to mirror the distribution of 
income and wealth. 

What would a 'right to rent' mean in 
practice? A first, minimal, step would be 
to sweep away, by statute, all the restrictions 
which still prevent many households 
from even registering a wish for public 
housing. Local authorities in England and 
Wales are free at present to exclude people 
from their housing list on the basis of 
residence, age, marital status, tenure, income, 
or any other factor-and many of 
them do so. 

Such a step would at least prevent demand 
for rented homes from being auto


10 



matically stifled. A second step would be 
to require a more actiyist approach from 
local authorities, by imposing on them a 
statutory duty to make a regular and comprehensive 
assessment of unmet demand 
in their area and to publish the results. 

These measures would increase the 
political pressure for adequate provision, 
but would not in themselves extend the 
housing rights of particular households. A 
major move in this direction, however, 
would be the extension of the Housing 
(Homeless Persons) Act, to place a legal 
duty on local authorities to secure a home 
for anyone who has nowhere to live, including 
all single and childless people. 

'Homelessness' at present means literal 
absence of somewhere to go. But a further 
development could be a progressive extension 
of this definition. People with disabilities 
living in physically unsuitable 
housing; black people in areas vulnerable 
to racial harassment; women living in insecure 
estates; single parents or elderly people 
remote from the facilities they need such 
groups could in time be regarded as 
homeless in a social if not in a literal sense, 
and given a right of access to more suitable 
housing. 

The traditionally very weak bargaining 
position of the homeless would be further 
strengthened if, instead of relying as at 
present on a general local authority duty 
to 'secure accommodation' for them , they 
were able to identify a suitable home on 
the market -'suitability' would of course 
have to be defined, but there are legislative 
precedents -and require the local 
authority to acquire it if unable to meet 
their needs from its existing stock. 

A similar right to require local authority 
purchase could also apply to privatetenants, and indeed to owner-occupiers, 
within their existing homes. As far as private 
tenants are concerned, the Labour 
Party has a long-standing commitment to 
bring the remaining private rented sector 
into social ownership. A tenant's right to 
require purchase would, however, ensure 
that the pace and priorities of the acquisi


tion programme were to some extent determined 
by the affected tenants themselves. 
A 'right to sell' for owner-
occupiers could be of major value and 
attraction, for example, to elderly owners 
no longer wishing to cope with repairs and 
other responsibilities; or to women with 
children after the break-up of a relationship. 


For the homeless and ill-housed , of 
course, while a framework of statutoryrights will make their needs harder to 
ignore, this will be of little or no benefit 
unless there is an adequate supply of 
rented housing, in the right places and of 
the right quality. The measures advocated 
above must therefore be complemented 
by a major programme of housing investment 
-and, we believe, of public sector 
acquisition from the private sector -and 
this is the theme of the next chapter. 

Aright to buy 

Within the radically different context of a 
sustained programme of investment and 
an effective 'right to rent', we believe 
Labour would be able to reconsider its 
opposition to the 'right to buy' for public 
sector tenants without sacrifice of principle. 
The 'right to buy' as much as the 'rightto rent' expresses the underlying .right to 
choose, between tenures of equal status 
and esteem, which we have been urging. 
But sales should not be on the deeply unfair 
terms of the present legislation.
Purchases should generally be at market 
prices, if there is to be a fair balance between 
the costs of owning and renting although 
there may be an argument for 
discounts for those who became tenants in 
earlier years. There should also be a statutory 
duty on the public sector to replace 
homes sold, either by new building or acquisition, 
unless there is demonstrably no 
unmet demand for rented housing in that 
area, in order to ensure that Tory-
controlled councils maintain their stock of 
rented housing. 

The 'right to rent' and the 'right to buy', 
as we have outlined them, together with 

11 



further rights over their homes for both ment to extending individual rights in 
tenants and owners to be developed in housing on a basis which, in sharp contrast 
later chapters, could be brought together to present policies, is even-handed be-
in a comprehensive Housing Rights Act. tween the tenures. 
This would symbolise Labour's commit


4. AHousing Programme for 
Labour 
Through the 1970s the view became widespread that Britain's real 
housing problems were almost solved. Politicians of all parties talked 
smugly about a surplus of homes. With growing aggression, the homeless 
and badly-housed were blamed for their own plight -labelled as feckless, 
young drifters or, in the words of legislation itself, "intentionally home


less". 

This complacency and scapegoating could 

never be justified. Even by the conven


tional measures of housing stress, the 

scale of poor housing and unmet need was 

always formidable. And the savage cuts in 

housing programmes inflicted by the Con


servative Government since 1979 have 

made housing conditions far worse. 

Measured by traditional yardsticks 

there had, of course, been very substantial 

progress over the post-war years. But 

these yardsticks of housing stress are 

anachronistic. The definition of a dwelling 

'unfit for human habitation' was set some 

50 years ago -and will not be strengthened 

by the changes now proposed in the Gov


ernment's Green Paper on home improve


ment. Lack of amenities should no longer 

be judged only by the absence of a bath, 

hot water supply or inside toilet. The of


ficial definitions do not measure deficien


cies in sound or thermal insulation, lack of 

space for contemporary living patterns, 

the nightmares of dampness caused by de


fective construction or disrepair, or the 

strains caused by poor neighbourhood en


vironments -dangerous lifts and walk


ways , non-existent community facilities , 
isolation from shops and transport. 

Thousands of people also suffer experiences 
of oppressive housing, neglected in 
conventional perceptions of housingneed. They include people imprisoned in 
relationships that have broken down, 
young people unable to leave home and 
become independent, those trapped for 
years in archaic institutional hostels and 
all those forced to live 'doubled up' on the 
floors of friends or relatives. 

All these are acute forms of housing 
stress. They result not from some pathological 
failure of individuals, but from the 
persistence of reactionary prejudices and 
the miserably inadequate levels of housing 
investment. Labour's task is to create an 
awareness of the full extent of housing 
poverty, and to develop a housing programme 
to meet the housing standards that 
can be expected in the 1990s by every 
member of the community. 

Private sector obsolescence 

The 1981 English House Condition Survey 
confirmed disturbing impressions of 

12 



TABLE2 
Condition of the housing stock 
(thousands, percentage of total stock) 


1971 1976° 1981 
Unfit 
Fit but lacking one or 
1,216 (7) 1,162 (7) 1,116 (6) 
more basic amenities 
Fit but needing 
1,828 (11) 746 (4.7) 390 (2.3) 
repairs costing:b 
i. £2,500 to £7 ,000 2,473 (14.6) 
ii. more than£7,000 326 (2.2) 395 (2.5) 574 (3.4) 

(Source: DOE, English House Condition Survey, 1981, 1982. 

a. The 1976 figures have been revi ed in the 1981 Survey to allow for 
changes in methodology and definition . 
b. At 1981 prices.) 
accelerating deterioration in the state of 
the existing housing stock. As Table 2 
shows, although there was a very sharp fall 
in the number of homes lacking basic amenities 
between 1971 and 1981 , the number 
of unfit homes remained at the same level 
and there was an increase in the number of 
homes needing repairs of £7,000 or more 
(at 1981 prices).

In total, it is estimated that in 1981 there 
were just over 2 million dwellings in England 
(over 10 per cent of the stock) that 
were either unfit, lacking basic amenities 
or in a serious state of disrepair; 21f2 million 
more requiring repairs of between 
£2,500 and £7,000. 

The worst conditions are still concentrated 
in the privately rented sector. Especially 
serious are the conditions in multi-
occupied hostels, lodging houses and bedsit 
flats. The Institution of Environmental 
Health Officers estimates that more than 
80 per cent of the 180,000 multi-occupied 
dwellings (HMOs) are unsatisfactory. At 
worst they contain the most appallingly 
dangerous and squalid conditions. 

What the evidence also shows, however, 
is a marked growth in the extent of 
disrepair in owner-occupied housing, and 
this is to be found particularly amongst 
elderly home-owners. The number of 
owner-occupied dwellings requiring repairs 
costing more than £3,000 (at 1981 

prices) rose from 314,000 in 1971 to 
539,000 in 1981. 

The fundamental causes of this worsening 
obsolescence are the abandonment of 
previous policies of slum clearance and 
housing renewal, yet without any adequate 
alternative to replace them. The 
annual rate of slum clearance fell from 
88,713 in 1972/3 to only 20,919 in 1982/3 
In reaction against the "bulldozer' 
approach, the new approach to housing 
renewal espoused in the early 1970s and 
enshrined in the 1974 Housing Act proposed 
the declaration of Housing Action 
Areas to renovate -rather than redevelop 
-the worst areas of run-down 
older housing. Initially it was recognised 
that this would require intervention by 
local councils and housing associations to 
take over and modernise these properties, 
especially from the private landlords who 
were unwilling or unable to carry out improvements. 
Increasingly, however, the 
cut-backs in local authority housing investment 
allocations and the limits imposed 
by central government on acquisitions 
have made renewal strategies reliant 
on improvements by private owners. The 
main area of policy has also tended to 
exclude from attention large numbers of 
scattered sub-standard properties. 

The rate of take-up of improvement 
grants by private owners has varied dra


13 



matically over the past 15 years, fluctuating 
in line with changing Government 
policies on the level and proportion of 
grants payable and the availability of 
funds. From a peak of 242,000 grants 
approved to private owners in 1974, the 
number fell to 91,000 in 1981. With the 
pre-election bonanza of 1983, grants 
soared to a level of319,000-but have now 
slumped dramatically with renewed cuts 
in local authority housing expenditure. 

The consistent pattern, however, is that 
grants do not benefit those living in the 
worst dwellings. Take-up is primarily bybetter-off and younger owner-occupiers, 
frequently linked with the purchase of an 
older property needing renovation. Conversely, 
55 per cent of all properties now 
lacking amenities, 43 per cent of all unfit 
properties and 34 per cent of all properties 
in a serious state of disrepair are occupied 
by elderly households. 

Behind this complex pattern of changes 
is akey political trend. The shift from slum 
clearance and redevelopment to improvement 
policies has also meant a move from 
programmes carried out by public agencies, 
using compulsory powers, to those 
almost wholly reliant on voluntary private 
sector activity. Insensitive clearance plans 
of local authorities were justifiably discredited, 
but dependence on voluntary improvement 
by private owners-even with 
generous grant inducements -has been a 
miserably inadequate strategy. Those who 
have suffered have been the poorest residents-
both owners and tenants -living in 
the worst accommodation. 

Public sector defects 

Relatively few local authority homes are 
unfit -or even in a poor state of repair according 
to the conventional criteria. Yet 
the evidence is growing that large numbers 
of council dwellings, including many 
built within the past 20 years, need urgent 
remedial action. 

The Association of Metropolitan Authorities 
(AMA) estimates that these include 
500,000 homes built using non


traditional building techniques in the late 
1940s and '50s. The Government has formally 
admitted that 170,000 of these are 
potentially defective by designating the 
systems under the 1984 Housing Defects 
Act. The AMA estimates the average cost 
of repair at £10,000 per unit. 

The AMA has also estimated that there 
are one million homes built during the 
1960s and '70s using systems-building techniques. 
They have estimated an average 
repair cost of £5,000 per unit, but the results 
of detailed studies on individual 
estates suggest that the scale of work 
needed may be substantially greater. 

The problems caused for the tenants in 
the estates built under these systems are 
acute. Rain penetrates through faulty 
roofs and ill-fitting pre-cast units; sometimes 
floors bow to leave gaps between 
floors and walls; there have been cladding 
failures, spalling of concrete, defective 
balconies, rotting window frames, inadequate 
insulation and widespread use of 
unsafe materials such as asbestos and high 
alumina cement. 

The human meaning of the stress these 
defects cause is best expressed by the 
tenants who have had to endure them: 

"My new house has a garden, a safe cui de 
sac for the children to play in , different 
types of housing around to break up the 
skyline and I do find myself sometimes just 
looking out of the window at trees, flowers, 
terraced houses, chimneys, bungalows, my 
kids playing safely and know that the total 
oppression of the grey concrete monolith of 
Hunslet Grange has been lifted from me 
forever. 

"I'd like to repeat that you may know 
about the problems, but you can't really 
know what it's like. You can't know what 
it's like to spend a fortune heating your flat 
and know your children are still cold at night 
... You can't know what it's like to find 
your clothes, belongings, furniture, covered 
in mould growth ... You can't know what 
it's like to be told that you're to blame for 
condensation . . . You can't know what it's 
like to sit listening to the wall panels popping 
as they expand and to find a lump of 
concrete in the kids' sandpit the next morn


14 



ing ... You can't know what it' like to be 

refused credit becau e you live in 'that awful 

place' ... You can't know what it' like, but 

we do fervently believe that it houldn't 

happen again to u or to anyone el e." (M. 

Steane, Damp, Defective & Dangerous, 

SCAT 19 4). 

Yet local authoritie were vigorou ly 
pressed by the Government to adopt the e 
techniques in the 1960 . Authoritie u ing 
indu triali ed method were promi ed 

pecial arrangement for approval, encouraged 
by favourable ub idie , advi ed 
to rely on the technical experti e of the 
Mini try and the National Building Agency 
and rewarded with extra allocation for 
hou e building if they cooperated with the 
drive towards industrialised ystem . 

The housing shortage 

A crude comparison how that there are 
now approximately 800,000 more dwelling 
than household in England and 
Wales. 

However, allowance must be made for 
more than 200,000 second homes and a 
vacancy re erve of approximately 800,000 
dwellings (consisting of recently built 
house , dwellings vacant because of 
mobility and empty for other rea ons), 
turning the apparent surplus into a shortage 
of over 200,000 homes in 1981. The 
AMA estimates that by 1986 this will have 
become a shortage of over 500,000 dwellmgs. 


Yet even this seriously under-states the 
extent of the housing shortage. The enumeration 
of households ignores the demand 
from all those people who want to live 
independently, yet are unable to secure 
anywhere to live. 

The Sharers Survey recently completed 
by the Department of the Environment, 
based on the 1977 National Dwelling and 
Household Survey, shows that there were, 
for a start, an estimated 128,000 married 
couples and single parents living as 'concealed' 
households, who wished to live 
independently. However, no assessment 
was made of the very substantial numbers 

of single people who are 'concealed' 
hou eholds. There are now 9 million single 
adult of working age in the population 
(repre enting 30 per cent of the population 
aged between 16 and 65). Le s than 
one in ix currently form ingle person 
hou ehold , yet there i no doubt that 
growing number of ingle people would 
prefer to live independently. Thi include 
many young people wanting to leave their 
parental home (and ome who have no 
choice). There i now a very erious problem 
of 'concealed homele ne ' amongst 
thi group, with people forced to Jeep 
temporarily on the floor or ofa of 
friend and relative . The evidence also 
show that women are e pecially vulnerable 
to this form of homelessne rather 
than the more vi ible occupancy of 
emergency ho tel and night shelter 
which cater primarily for homele men. 

In addition, there are more than 50,000 
people living in ho tel and common lodging 
houses, and more than 100,000 Supplementary 
Benefit claimants living in 
board and lodging accommodation (excluding 
ho tels). For the majority this 
mean temporary bed and breakfa t 
accommodation in poor tandard and 
overcrowded 'hotels'. Since people living 
in the e communal e tabli hment are not 
recorded a households, once again they 
are ignored in the conventional estimate 
of the demand for housing. 

Underlying all these manifestations of 

hortage is the drastic decline in rates of 
housebuilding over the pa t 20 year . In 
1967 and 1968 more than 400,000 home 
were built, divided almo t equally between 
the public and private sectors. By 
the mid-1970s the average had dropped to 
just over 300,000, with the shares remaining 
broadly the same. From then, the 
numbers dropped steadily year by year, 
reaching the nadir of 171 ,000 in 1982-and 
with only 50,000 of these in the public 
sector. In short, the annual level of house 
building in Britain is at less than half the 
level of 20 years ago. The number of new 
homes built for rent is a quarter of the 

15 



level achieved in the late 1960s. 

It is, of course, true that too many of 
those homes were the systems-built disasters 
described earlier. The failure now i 
that instead of learning from those errors 
by building well-planned rented homes of 
good quality, public sector house building 
has been almost abandoned. The shortages 
in the rented sector have been 
further exacerbated by council house sales 
under the 1980 Housing Act. More than 
800,000 council homes have now been 
bought by exi ting tenants since 1979 overwhelmingly 
houses rather than flats, 
and including a disproportionate number 
of the most attractive properties. 

Investment priorities 

There are three major investment priorities. 
Firstly, action is urgently needed to 
tackle the problems of unfitness and disrepair 
in the private sector. Given the failure 
of financial inducements to private landlords, 
the main thrust of Labour's policy 
should be the use of compulsory purchase 
powers against those who have failed to 
bring their property up to a satisfactory 
condition, plus the statutory right described 
earlier for private tenants to require 
the local authority (or a nominated 
housing association or cooperative) to buy 
the property. Stronger and faster powers 
are needed to compel landlords to carry 
out outstanding repairs or remedy inadequate 
fire and other safety precautions. 
Resources should be concentrated 
in the worst areas of run-down older housing, 
but avoiding the arbitrary tight 
boundaries of the Housing Action Area 
and General Improvement Area 
approach. It is essential, however, that 
staff engaged in the work of housing renewal 
are based in local neighbourhood 
offices and that local committees are set 
up through which local residents and 
councillors can oversee progress on improvement 
programmes. 

Because it favours the better-off, the 
present system of improvement grants to 

owner-occupiers cannot be justified, and 
is in need of reform. The basic dilemma 
stems once again from the tension in housing 
between the collective and the individual. 
There is absolutely nothing wrong 
with directing public expenditure at the 
improvement of the national housing 
stock. In the private sector, however, the 
resulting capital appreciation is enjoyed 
by private households, at the expense of 
the community as a whole. 

The recent Green Paper on home improvement 
recognises and attempts to 
tackle this problem -but cannot do so 
constructively because it is imprisoned 
within the Government's wider housing 
and public expenditure policies. The role 
of local authorities and housing associations 
in acquiring and renovating decaying 
private sector housing has been virtually 
ended. No incentives have been propo ed 
to encourage private owners to undertake 
more responsibility for the upkeep of their 
homes -indeed, record mortgage interest 
rates must have the opposite effect. The 
Green Paper specifically rejects the view 
that minimum housing standards must 
move with the times, instead proposing a 
new standard of 'unfitness' in some respects 
below that now prevailing. 

It is in this context that the Government 
propose sharply to reduce the availability 
of grants, partly by means-testing and 
partly by a switch from grants to loans. 

We do not believe that means-testing is 
the right answer to the problem of public 
money and private gain. The disadvantages 
of means-tests are well known. 
There is in addition a risk that necessary 
improvements to the housing stock will 
not take place because the present occupiers 
are denied help-very probably with 
greater costs for the community in the 
longer term. 

Thus it is preferable to retain the general 
availability of financial help, while 
trying to ensure that private gains are 
clawed back to the public purse at an 
appropriate time. Adequate capital taxation 
on housing would be one approach 


16 



considered further in chapter 7. An 
alternative is the approach now supported 
by the Government-that improvement 
grants should be treated as long-term 
loans, registered as a charge on the property, 
and thus reclaimed when the property 
is next sold. The Government's particular 
proposal is defective, in that it ignores 
the 'valuation gap' -the frequently-
observed phenomenon of improvements 
adding less to the value of the house than 
they cost to carry out. But this is not an 
inherent feature of the general approach. 

We would also support the development 
of 'agency services' by local authorities, 
housing associations and cooperatives 
to advise home-owners on the work 
that is needed; concert the resources of 
the local building industry; and supervise 
the conduct of the work. The experience 
of pioneering 'staying put' schemes for 
elderly people who want to remain in their 
present homes has shown the value of this 
approach. 

The second key investment priority is to 

modernise older council property and to 

put right the major defects on post-war 

estates. It is monstrously unfair that the 

1984 Housing Defects Act gives private 

owners the right to compensation, yet de


nies any legal remedy to tenants trapped 

in defective estates. A programme for 

dealing with defective housing must aim to 

tackle all such properties, whether pri


vately owned or tenanted. It must be built 

on the basis of a partnership between cen


tral government, local authorities and the 

residents. And the priority should be the 

health and safety of those living in defec


tive homes. 

Thirdly, a programme of new house 

building is needed, most urgently to re


duce the acute shortage of satisfactory 

public rented housing. The need for new 

building is clearly most acute in some 

areas of higher economic activity, house


hold movement or formation and historic


al housing shortage. Local authorities and 

other social agencies also need to be en


couraged to plan a wider range of housing 

provision than in the past, including more 
furnished accommodation for single people, 
more supportive accommodation , 
small hostels and shared housing developments, 
and the development of "direct 
access" emergency accommodation in 
each area. The relative contributions of 
local authorities, housing associations and 
housing co-ops should be determined primarily 
by the preferences of prospective 
tenants. 

Despite the urgency of the demand for 
more homes, however, priority must be 
given to providing housing of the best 
possible quality. Past experience shows 
only too clearly the folly of sacrificing 
standards to short-term expediency. The 
homes of the future should be carefully 
planned, wherever possible in consultation 
with the people who will live in them. 
In the main they should be low density 
developments, predominantly houses 
with gardens, built to tried and proven 
building methods, and including proper 
sound insulation , thermal insulation and 
energy-efficient heating methods. 

While concentrating on expanding the 
supply of rented housing, however, a 
Labour Government should avoid any 
complacent assumption that everything is 
rosy in the private sector. Intervention is 
needed here too -a point we return to in 
Chapter 6. 

The role of public sector acquisition 

If the Labour Party is to campaign vigorously 
for the right of every member of the 
community to a safe, secure and satisfactory 
home, hopes will be raised. 
Thousands and thousands of people, including 
all those who are unable to obtain 
a home of their own at all, will properly 
expect that a new Labour Government 
will act quickly to meet that commitment. 

The difficulty is, however, that new 
house-building is painfully slow -and 
more so if crash programmes are firmly 
rejected. Remedial and renovation work 
on defective or sub-standard properties is 
vitally urgent, but it does not provide 

17 



more homes. The risk is that, once again, 
hopes will be shattered and people desperate 
for a home disillusioned. 

Resolving this dilemma is absolutely 
essential if Labour's housing policies are 
to retain credibility and committed support. 
In the early years of a Labour Government 
this can only be done by a major 
programme of acquisition of good quality 
homes from the private sector, to be let as 
rented accommodation by local authorities, 
housing associations and housing coops. 
We need, in fact, to rid ourselves of 
the profoundly conservative idea that 
public rented housing must be ossified 
forever in the form determined by what 
has been built for public landlords historically 
-minus the dwellings bought by 
tenants. If it is imprisoned within this politically 
determined legacy, it is inevitable 
that public housing will be equated with 
unpopular flatted estates. 

There have, of course, been 'municipalisation' 
programmes in the past, concentrating 
on the purchase of run-down older 
properties. As already argued, there is an 
important role for this form of intervention, 
since the vast majority of private 
landlords have neither the will nor the 
resources to carry out the repairs and improvements 
that are needed. 

In addition, however, every year approximately 
1,400,000 homes change hands 
on the owner-occupied market. The 
majority of these are houses with gardens 
-exactly the type of dwelling in heavy 
demand in the public rented sector, yet 
lost through the 'right to buy' policies of 
the present Government. By acquiring 
only a small fraction of the houses voluntarily 
sold with vacant posse sion, local 
authorities and other social agencies could 
begin to redress quite rapidly the unprecedented 
losses of rented housing experienced 
during the last six years. 

Such purchases could come about in a 
variety of ways. The previous chapter discussed 
a 'right to rent' scheme under 
which the homeless and ill-housed would 
be able to identify a suitable home for 

public sector acquisition on their behalf. 
A statutory duty to replace dwellings sold 
was also proposed. Alternatively, local 
authorities might simply enter the market 
on their own initiative. Or it might be 
possible to strengthen their position by 
giving councils a statutory right of first 
option to purchase any vacant dwelling 
put up for sale. 

Such a programme might have some 
inflationary impact on house prices. The 
scale of this risk would clearly depend on a 
number offactors, including the size of the 
programme itself; the extent to which increased 
opportunities to rent reduced the 
demand to buy; and the response of 
housebuilders to a reduced supply of 
second-hand dwellings. Areas with little 
land available for new building would 
clearly be most vulnerable. The diversion 
of an appropriate proportion of building 
society funds to local authorities could 
dampen inflationary pressures. 

At the end of the day, however, ome 
impact on prices should probably be 
accepted. The object of the exercise is, 
after all, to redress the imbalance of 
opportunities between renters and owners. 
Within the owner-occupied sector, 
however, any such redistribution is not 
going to occur through administrative 
rationing; it can only come about through 
the adjustment of owners' housing consumption 
to a slightly higher price level. 

It is true that such interventions do not 
increase the supply of dwellings for the 
community as a whole. The justification is 
that the Tory Government has enforced a 
viciously discriminatory cut-back and 
transfer of rented housing, in favour of 
owner-occupation. On grounds of social 
justice and equality of treatment, a future 
Labour Government would be totally 
reasonable in reversing this process. 

New forms of democratic planning 

It is commonplace to conclude analyses of 
future housing programmes with targets 
for the numbers of homes to be built, renovated 
and made fit. The flaw in that 

18 



approach is not only that such projections 
tend to be highly arbitrary but also that 
they reflect a persistently centralist 
approach. 

A housing policy constructed from the 
bottom upwards must mean that housing 
plans and priorities are set locally, based 
on full discussions with those in unsatisfactory 
housing-and those without a proper 
home. If local authorities were under a 
statutory obligation to prepare annually a 
comprehensive assessment of housing 
needs and demand in their area, to discuss 
this with local people and to publish their 
report and plans, this would provide an 
essential framework for local housing 
programmes. 

There will sadly be some authorities 
which fail to match this assessment of unmet 
demand with adequate plans. If there 
are stronger statutory rights to proper 
housing for everyone, this would be far 

more difficult than at present, but it is still 
likely that some councils would abrogate 
their responsibilities. In these circumstances, 
strategic use should be made of 
Housing Corporation funding for housing 
associations to ensure proper programmes 
of social rented housing. 

The opportunity is there for Labourcontrolled 
councils to adopt this new 
approach now. They can make a full 
assessment of unmet need in their areas. 
They can draw up, in collaboration with 
local tenants' and other community 
group , plans for the housing programme 
that is needed. Preparations can already 
be started for imaginative housing developments 
of good quality, which excite 
the imagination and commitment of the 
people who will benefit. And all this can 
be the basis for vigorous local housing: 
campaigns, publicising what Labour's 
housing programme will do. 

5. ABetter Deal for Renters 
The policies discussed above can transform the condition of the housing 
stock and the quality of homes available, especially to those who need or 
choose to rent. However, the aim ofdeveloping rented housing which is as 
attractive as owner-occupation cannot be achieved without radical 
changes in the ways in which existing public housing is run. 

No analysis of local authority housing can There are two inter-connected reasons 
carry conviction unless it recognizes the which explain why this has happened. 
gulf that separates the ideas from the reali-First, the management of local authority 
ties of everyday experience. Many council housing has developed in the ideological 
tenants feel alienated from their land-tradition of Victorian paternalism and 
lords. Very commonly tenants complain within the framework of centralised muniof 
remote bureaucracies, of being treated cipal bureaucracy. It has been a producer-
with disdain by officials, of not being able dominated form of housing, rather than a 
to obtain redress for grievances and lack-service shaped by the preferences and 
ing any opportunity for choice. aspirations of the users. 

19 



Secondly, it has been profoundly conditioned 
by the dictates of scarcity. Since 
demand exceeded supply at socially 
reasonable rents bureaucratic rules were 
essential to determine priorities. The task 
of acquiring sites and clearing substandard 
housing, organising the rehousing 
of the occupiers, planning new 

developments and allocating the new 
homes required strong statutory powers 
and large numbers of staff. The imperatives 
dictated by need resulted in mass 
solutions, repetition and rationing. 

And as the values of the professionals 
were matched by these external constraints, 
the practice became still more 
deeply imprinted with authoritarian, elitist 
and centralising tendencies. Housing 
managers were able to treat their tenants 
as recipients of welfare hand-outs. 
Architects and planners were permitted to 
impose their choices. Two comments from 
a Director of Housing illustrate the practice: 


Interviewer: 'Do you recall a protest about 
this time by a group called the Beckton ward 
Residents' Committee?' 
Director of Housing: 'Oh yes. Very strong 
protest. ' 
Interviewer: 'How did it work out in the 
end?' 
Director: 'Well', (surprised) 'like it had to. I 
mean , we're open, the facts are available. 
We had protest meetings and we simply told 
people the truth and said "You want to get 
out of these rotten slum . We've got to build 
the accommodation necessary for you. 
Here it i on the doorstep, in high ri e! And 
that' all we can offer you" ... You know, 
there' a skill in dealing with people that 
achieved that result' . 

'When people are offered the accommodation 
we endeavour w make the offer 
as reasonable as we can in accordance with 
requirements. We endeavour to spell out to 
people that if they think they're going to get 
a house they're going to be jolly unlucky, o 
they'd better say they're prepared to take 
something else .. . We can't afford too 
much picking and choosing'. (P. Dunleavy, 
Politics of Mass Housing, Clarendon Pres , 

1981 ). 

Local management and control 

Our urgent task is to rescue public housing 
from this statist embrace and re-define the 
purpose of social welfare policies. As the 
Fabian Society submission to the Labour 
Party's recent housing policy review stresses, 
Labour has suffered from its attachment 
to large, hierarchical, centralised 
state bureaucracies. However, there is 
also a strong decentralist tradition in 
socialist thought, and Labour now needs 
to show that it is gerruinely prepared to 
devolve power and to trust people to make 
choices for themselves. (Housing: Choice 
for People, submission by Fabian Society's 
Housing Working Group to the 
Labour Party NEC/PLP Joint Policy 
Committee on Housing, May, 1985.) The 
submission cites an impressive range of 
Fabian pamphlets over the years which 
have advocated this approach. For example, 
Brian Abel-Smith wrote in 1964: 

"We have got to rid ourselves of the autocratic 
frame of mind of some civil servants, 
local government officers and councillorseven 
Labour councillors. Too many of these 
people see themselves as givers -endowed 
by this relationship with the right to determine 
the exact shape, size and character of 
the gifts, irrespective of what the beneficiary 
sees as his needs . . . Unless there are 
very strong reasons to the contrary people 
should be allowed to make their own 
choices, and the state's job is, first, to widen 
the range of choice available, second, to 
restrain the opportunities for excessive privileges 
and, third , to warn , counsel and 
advise, leaving the final decision to the individual." 
(B. Abel-Smith, Freedom in the 
Welfare State, Fabian Tract No 353, 1964). 

Public housing must be re-shaped as a 
service responding to the expectations of 
those who live in it. The key principles, 
closely intertwined, are that tenants 
should be encouraged to take responsibility 
for as much control of the running of 
their homes as they wish; the day-to-day 
services must be the responsibility of 
known and accessible individuals, based 
at estate level; and decisions must be devolved 
to the most local level practicable. 

20 



Some of the most influential advocates 
of this approach in recent years have come 
from the Department of the Environment's 
Priority Estates Project (PEP), set 
up to work with local authorities to establish 
housing management and maintenance 
teams on run-down unpopular 
estates that are hard to manage. Their 
recent leaflet outlines "The PEP 
approach": 

"* an office on t e estate open

h to 
residents Monday to Friday 

* all staff needed to run the estate 
based at the estate office 
* all key management tasks, including 
control of repairs, carried out 
from the office ... 

Successful management of the estate de


pends on the full backing of the majority of 

residents. They should have the major say 

in defining problems and setting priorities 

for improvements. They have a critical role 

in making the estate a safe place to live and 

in holding the community together. Staff 

must build into their work effective ways of 

consulting residents and of securing their 

support". 
Many socialists are understandably suspicious 
of any ideas emanating from the 
Tory Government's Department of the 
Environment -but one of the most intriguing 
sights of the last few years has been 
the successful partnership between the 
Priority Estates Project and a number of 
the most well known left-wing Labour 
councils! Their justification is that the 
principles underlying the PEP approach 
are wholly consistent with a socialist policy. 
"Trust the tenant" is a slogan which 
should be above the desk of every councillor 
and housing officer. "Small is beautiful" 
is certainly true for the organisation 
of housing management. Compensating 
for the poverty of run-down neglected 
estates is a socialist priority. 

This is not to deny that the motives of 
Tory Ministers are very different. Showing 
that better local management can reduce 
empty properties and increase the 
popularity of estates can be used politically 
to justify still more cuts. Good local 
management becomes an alternative to 

adequate levels of housing investment 
while for Labour they must go hand i~ 
hand. 

Once the broad principles of local management 
and control are accepted, they 
can take a variety of institutional forms largely 
depending on how far the tenants 
themselves want to go. The vital minimum 
is that public landlords should afford real 
rights of consultation to representative 
tenants' associations-and should ensure

' 

without compromising their independence, 
that these have the resources and 
support to make this a reality. There has 
to be a complete break with traditional 
Labour suspicions about autonomous 
forms of popular organisation. 

Taken a step further, similar arguments 
favour the development of housing cooperatives, 
through which tenants collectively 
own and control the homes they live 
in. There are now more than 200 such 
co-ops registered with the Housing Corporation. 
Despite having to surmount 
considerable administrative, financial and 
political obstacles, many co-ops have 
shown the benefits that can be gained from 
full tenant participation and control. 
Some have made a significant contribution 
towards housing groups excluded from 
other forms of decent housing, some have 
played an important role in the regeneration 
of inner city neighbourhoods. Yet 
some have had to counter strong opposition 
from Labour councils -most notoriously 
in Liverpool, where co-op members 
had pioneered the full involvement of 
prospective tenants in the planning and 
design of their future homes, only to encounter 
a new Labour council insistent on 
traditional council housing as the one true 
way.

Two arguments are commonly used 
against these movements towards local 
management and tenant control. First, it 
is claimed that they are simply a way of 
shifting responsibility for inadequate resources 
onto tenants, and making the 
most junior staff the scapegoats for Government 
cuts. This interpretation mis


21 



/ 

reads the process that can take place. Of 
course the scale of resources is a critical 
issue, and no form of local action alone 
can secure those resources. But what most 
commonly happens within traditional 
council structures is that problems caused 
by lack of funds are not distinguished from 
problems due to administrative inefficiency 
or political insensitivity. The positive 
benefits of local control are that tenants 
can understand the causes of different 
problems and respond appropriately,
while councils are more likely to develop 
the public support they need in campaigning 
for more resources. 

The second argument against local control 
is that it lacks fairness and objectivity 
in making decisions, especially in relation 
to housing allocations. Local authorities, 
it is maintained, are able to balance the 
competing priorities and ensure that impartial 
rules are implemented. Ifthese decisions 
were devolved to the local level, 
and especially if tenants had a say in 
allocations, this would result in discrimination 
against unpopular minorities 
and opportunities for nepotism and graft. 

These fears are voiced by many reasonable 
people, with a serious concern to protect 
the reputation of local government 
and to ensure that priority is given to those 
in housing need. The consequence,
however, is that ordinary tenants are denied 
any say in who is offered housing. 
Exclusion from responsibility inevitably 
breeds resentment. It then becomes 
scarcely surprising that, for example,
long-established tenants, unable to obtain 
transfers and desperate to find homes for 
their grown-up children, react with hostility 
to outsiders who they feel have been 
imposed upon them and their neighbours. 

Yet there are experiences from co:ops 
which show that tenant control of allocation 
can work fairly-even, perhaps especially-
in multi-racial areas of acute housing 
need. Decisions on eligibility for rehousing 
should be determined by reference 
to a local authority's overall priorities, 
and monitored to ensure equal access 

of ethnic and other minorities to all standards 
and types of public housing. But the 
practical decisions on which an individual 
is offered a particular house or flat can be 
made at the local level, with safeguards 
enforced both through statutory regulations 
against discrimination and proper 
monitoring procedures. 

An unambiguous defence of the needs 
of vulnerable -and sometimes unpopular 
-minorities is essential in a genuinely 
socialist housing policy. This is bound to 
involve difficult choices and conflicts of 
view in a time of worsening housing shortage. 
Experience suggests that where 
tenants are able to share in decisions and 
secure at least some of their legitimate 
priorities ( eg to have some lettings for 
"sons and daughters" on their estate), the 
majority accept the importance of enforcing 
agreed rules scrupulously, giving 
priority to housing need and offering access 
to newcomers from outside their 
estate or area. 

Underlying this debate is a more fundamental 
issue. Social priorities cannot be 
imposed by an allegedly enlightened elite. 
They need to be accepted as fair and right 
by the community as a whole. The dominant 
tradition of municipal housing belongs 
to the elitist school, ignoring the 
prejudice and stigmatisation that is practised 
in centralised bureaucracies as well 
as the antagonism of tenants to decisions 
imposed on them from above. 

What needs to be recognized is that, 
while there may be opposition to certain 
just and socialist allocation policies, in 
tackling this there is no alternative to persuasion-
to creating a progressive consensus 
by active leadership. Prejudice against 
racial minorities, hostility to the homeless, 
neglect of people trapped in institutions 
-these are attitudes that must be 
tackled by open argument in order to win 
a shared commitment to policies that are 
sensitive and fair. 

Individual rights 

So far in this chapter we have concen


22 



trated on proposals to develop tenants collective 
control over their housing. This is a 
distinctive and valuable potential within 
rented housing. But much of the allure of 
home ownership has, of course, rested on 
the individual rights which it offers to the 
householder. These are not reactionary 
rights from a socialist point of view; nor is 
there any reason why they cannot be 
matched in the rented sector. 

A number of detailed 'tenants' charters' 
have been put forward in recent years by 
such bodies as the National Consumer 
Council, Labour Housing Group, and of 
course tenants' organisations themselves. 
We do not want to trot out another such 
shopping list here, but the underlying 
principles are important. 

Tenants' rights should give real control 
to the individual tenant. Take repairs, for 
example: both tenants and home-owners 
face major difficulties in getting repairs 
done. But while the owner is able to take 
his or her own decisions, the tenant is at 
the mercy of a bureaucratic machine over 
which there is little or no sense of control. 
Local management should help; but as a 
back-up the tenant's contract must contain 
clear legal rights to repairs. 

Tenants' rights should foster genuine 
equality between tenant and landlord. The 
paternalistic view of the tenant as the recipient 
of a welfare hand-out should give 
way to a perception of the tenant ascustomer, 
linked to the landlord not by bonds 
of condescension and gratitude but by a 
contractual relationship. If local authorities 
find it too hard to disentangle such a 
relationship from their wider social service 
functions, more emphasis might ultimately 
have to be placed on other social 
housing agencies. 

To be useful rights must, of course, be 
readily enforceable. A third key principle 
is therefore that of access to the landlord's 
procedures. The courts are too remote 
and uncertain a procedure for enforcing 
tenants' rights. Landlords have the responsibility 
themselves for providingmachinery for the rapid resolution of dis


putes. There is also a case for separating 
the Environmental Health Service from 
the local housing authority, perhaps placing 
it under county authorities or the 
Health & Safety Executive, so that its independent 
enforcement role can be made 
available to council tenants. 

A final key principle is, once again, that 
of choice. Critical here is the maximum 
extension of individual rights into the 
allocation process. Priority schemes 
should be published and transparent, so 
that tenants and applicants can make informed 
judgements between options. 
Mobility should be greatly extended, both 
within and between local areas, by such 
measures as open transfer lists, rights to 
exchange, and the strengthening of the 
present inadequate machinery for inter-
authority transfers. Free movement 
should in principle be much easier in the 
public rented than the owner-occupied 
sector, and it is tragic that this potential 
has been squandered by bureaucratic inertia 
and parochialism. 

The future for private tenants 

Private tenants should have the same 
rights as those in the public sector -to 
satisfactory standards, to security of tenure, 
to control within their own home 
and to means of redress against failure to 
meet any of these obligations. 

All the evidence suggests, however, 
that the great majority of private landlords 
are not willing to let accommodation 
on these terms. The price demanded by 
landlords -and their political supporters for 
regeneration of the sector is whollyunacceptable to socialists: removal of 
security and no control over rents. The 
objective of Labour's policy, therefore, 
must be to secure the transfer of privatelyrented homes either into social ownership 
or to owner-occupation. The motive power 
in this process should come from 
tenants themselves, who should have the 
right to buy their home or to require its 
purchase by the public sector. Where 
tenants in a group of flats wish to exercise 

23 



these rights collectively, they should be 
entitled to do so. 

This transfer to more acceptable forms 
of renting or owning cannot be achieved 
immediately -and will probably take 1015 
years. In the meanwhile up to 10 per 
cent of all households will continue to live 
in privately rented accommodation, and 
action must be taken to strengthen their 
rights and improve their conditions. We 
have outlined in Chapter 4 the policies 
needed to tackle the severe problems of 
unfitness, poor amenities and disrepair in 
the private rented sector. In order to ensure 
that action is taken, local authorities 
must be under clear mandatory duties to 
inspect and enforce adequate standards of 
safety, repairs, amenities and management 
-especially in the multi-occupied 
bed-sits, hostels and lodging houses which 
contain some of the very worst conditions. 

Private tenants also need better protection 
against excessive rents. Under the 
Tories, the methods of rent assessment 
have increasingly favoured the landlord with 
re-registration now taking place every 
two years and rents being increased 
more rapidly than prices as a whole. Rent 
Assessment Committees are dominated 
by solicitors, valuers and surveyors and 
frequently display a bias towards the landlord. 
Reforms are needed which more 
effectively limit rent increases, especially 
where repairs are neglected. 

Fundamental to the protection of 
tenants, however, is security of tenure. 

Without this, most other rights are often 
scarcely worth the paper on which they are 
written, and tenants become vulnerable to 
harassment and intimidation. Successive 
Rents Acts introduced by Labour Governments 
have sought to confer security of 
tenure but each has been marred by major 
legal loopholes. Landlords have exploited 
these, often with the complicity of the 
courts, so that now only a minority of 
lettings fall within the protection of the 
Rent Acts. Although the courts have recently 
rejected the use of non-exclusive 
license agreements, in the Street v Mount-
fort judgement (Times Law Reports, 3 
May 1985), it is still too easy for landlords 
to evade granting secure tenancies 
through so-called holiday lets, bed and 
breakfast and other devices. And the 
shorthold tenancy provisions in the 1980 
Housing Act have provided further means 
for unprotected lettings. 

Following a Private Tenants Rally held 
in December 1983, a Charter of Private 
Tenants' Rights has been produced by private 
tenants federations, law centres and 
other campaigning housing groups. This 
sets out clearly the arguments for security 
of tenure for all tenants of absentee landlords, 
excluding from full security only 
lettings by resident landlords where there 
are shared living arrangements and other 
special cases licensed by the local authority. 
Labour must strongly support these 
policies, which should form a key element 
of the proposed Housing Rights Act. 

6. Sensible Help to Home Owners 
It is frequently implied that almost all home owners are well off and well 
housed. The reality, as described in Chapter 4, is that home owners are 
by no means a homogeneous group. Whilst the majority do enjoy good 
housing conditions, there are a substantial number ofowner-occupiers in 
unfit or poorly repaired property. Older people, in particular, on low 

24 



incomes are likely to occupy homes in a deteriorating condition, which 
they cannot afford to put right-or cannot face the anxiety and upheaval 
of trying to do so. There are younger families, especially from ethnic 
minorities, who have been coerced into house purchase by lack of any 
acceptable alternative and now find it hard to cope with the costs of 
mortgage payments and the upkeep of their home -especially when 
interest rates rise, unforeseen major repairs occur or their income is cut 
by redundancy or short-time working. 

Almost all owner-occupiers experience 
frustrations from the defects in the present 
system of home ownership in this country. 
The process of buying and selling a home 
is a nightmare for many people. The huge 
expansion of building society lending has 
provided the bulk of the funds for the 
mortgages that purchasers need -but the 
'front-loading' of mortgage payments 
means that in real terms the costs are 
greatest in the early years, which is often 
when responsibility for dependent children 
and restricted household income 
makes this especially onerous. 

There could be enthusiastic support for 
Labour policies shaped to tackle the real 
problems owner-occupiers face. The confused 
and conflicting attitudes to Owner-
occupation within the labour movement 
have tended to result in the worst of all 
possible worlds -paralysis in respect of 
the indefensible privileges of many better-
off owners and inaction on the problems 
which require imaginative responses. 

The pre-occupation of Tory policies has 
been with expanding owner-occupation 
through the 'right to buy' and other initiatives 
to promote 'low cost' home ownership. 
Initiatives such as shared ownership, 
improvement for sale and homesteading 
have had only a modest impact, 
despite constant Ministerial razzmatazz. 
Between 1979 and 1983 there were only 
7,000 shared ownership sales by local authorities 
and housing associations 
together and only 1,090 improvement for 
sale purchases. The sale of 800,000 council 
houses since 1979 clearly tells a different 
story, but the evidence strongly suggests 

that the rate of sales has now peaked, and 
is predicted to fall to under 70,000 a year. 
Still higher discounts might possibly reverse 
the downward trend, but even the 
present Tory Government may baulk at 
virtually giving properties away. Some 
council tenants will continue to buy-particularly 
middle aged married peoplewhose children have grown up -but the 
phenomenon of the 1979-83 period will 
not be repeated. 

The rapid growth of owner-occupation 
in Britain took place in historically specific 
conditions, which no longer exist. In the 
inter-war period, production for private 
ownership flourished within the exceptionally 
favourable context of ready land 
availability in suburban areas, low interest 
rates, plentiful mortgage finance and rising 
real incomes amongst middle class 
households. The post-war years witnessed 
30 years of rapidly rising living standards 
for most people, and especially skilled 
workers, a large potential supply of dwellings 
previously owned by private landlords, 
adequate green field land for new 
building, a massive growth in mortgage 
finance and consistent political support for 
generous tax treatment. 

The prospects for the next 20 years are 
significantly different. Not only will the 
number of properties bought from private 
landlords inevitably fall , but the· problemsof disrepair in those acquired previously 
will become more onerous. There is a 
dwindling supply of land for housing development 
on easy green field sites. More 
than 3 million people are registered as 
unemployed and the rate of economic 

25 



growth is unlikely to return to post-war 
levels. The 'right to buy' inducements cannot 
be repeated. Only mortgage tax relief 
-and other tax benefits -remain to lure 
prospective buyers (reinforced by the barriers 
at present to other alternatives). But 
the cost of tax relief to the Treasury is now 
enormous, and the consequences in higher 
house prices actually make it more difficult 
for first-time buyers. 

The private housing sector is now facing 
intractable difficulties. And the policies 
which brought rich political dividends for 
the Conservative Party, especially over 
the past decade, can neither sustain the 
same rate of expansion in home ownership 
nor solve the problems that growing numbers 
of owners face. If the Labour Party 
can develop effective policies on these 
issues, there is an opportunity to recapture 
the lost political ground. There are 
four key areas where practical initiatives 
can be taken to give sensible forms of help 
to home owners. 

Housing production 

The shortcomings of the private housebuilding 
industry have been well-
documented. They include disruptive instability 
in the level of output; poor conditions 
of employment and inadequate 
training, both reflecting the extensive use 
of casual labour; the use of unproven production 
methods and skimping on quality 
and space standards; and a bias towards 
developing green field sites rather than the 
more difficult inner city locations. 

These weaknesses create major difficulties 
for private buyers, and they must be 
tackled. While the reflex response might 
be public ownership, however, we are 
sceptical about this as a panacea in house-
building-though we would certainly support 
a more effective attempt at public 
ownership of development land. Private 
building companies, precisely because of 
their dependence on casual labour and 
other hired resources, are insubstantial 
entities, which there may be little value in 
acquiring. On the other hand, while there 

is a major longer-term potential for an 
expanded role for local authority Direct 
Labour Organisations, the track record of 
Labour authorities as managers of these is 
patchy, and expansion would have to be a 
careful and gradual process. 

In the short-term, therefore, we believe 
a framework of greater public intervention 
and regulation is needed. The Government 
should concentrate on stabilising 
the supply of mortgage. credit, developing 
satisfactory minimum standards and imposing 
an adequate national training 
scheme on the industry. Local authorities 
should as a minimum use their planning 
powers positively to control the quality 
and location of private building in their 
areas. Or they can intervene more directly 
by assembling land packages, using compulsory 
powers where needed , or by 
undertaking building for sale schemes. 
The immediate value of such schemes will 
be to plug gaps neglected by the private 
market, particularly in inner urban areas, 
but local authority housebuilding could in 
future evolve as a competitive public enterprise. 


In some areas there may also be opportunities 
for selling some existing council 
dwellings for owner-occupation, especially 
where local authorities have a disproportionate 
number of flats and are actively 
acquiring houses of the type that are 
needed for rent from the private ector. In 
all these areas the use of nomination 
arrangements can secure social control 
over allocation , giving priority to those 
waiting list and other applicants in need of 
homes in the area and who are able to buy. 

This socialisation of owner-occupied 
housing could be taken further by new 
legal forms of ownership-in-use. Local authorities 
would assume responsibility for 
the production and allocation of the 
accommodation, including reversion to 
the council when the occupier moves. 
During the period of occupation , the legal 
status and rights would be those of full 
ownership. There could, however, be the 
option of contracts for repairs and mainte


26 



nance, especially for elderly or disabled 
home owners. 

House exchanges 

Every year in Britain almost l iJ2 million 

households buy and/or ell their home. 
For many people it is not only a nerve-
wracking, but an unnecessarily expensive, 
time-consuming and inefficient process. 
In the past criticism has concentrated on 
the conveyancing monopoly of solicitors. 
Thanks to the pres ure generated by Austin 
Mitchell's Private Members Bill, action 
is at last being taken to reform the 
legal procedures for buying and selling a 
home. The authorisation of licensed conveyancer 
is already resulting in substantial 
reductions in legal fees , allthough the 
Government has now backtracked on 
proposals -promised to Mitchell -to 
allow building societies to include conveyancing 
in a 'one stop' service. Proposals 
for a log book for each house would 
bring further benefits. The log book would 
show the legal title to the property and 
contain details of all legal earches, the 
answers to all standard inquiries and the 
results of an independent survey. The log 
book would be made available by the seller 
to the prospective purchaser as soon as 
a sale was agreed. By placing the onus on 
the vendor to provide this information at 
this early stage, the procedure would save 
a considerable amount of time and abortive 
effort. 

Changes are just as badly needed in 
relation to the role of estate agents. The 
fragmentation of the estate agency business 
into a very large number of mainly 
small firms frequently requires a prospective 
buyer to collect information from 
numerous agents. This information is 
often duplicated and rapidly out of date. 

The costs of estate agents are exhorbitant, 
especially in London where fees of 3 
per cent (plus VAT) on the selling price 
are now standard. Thus the payment to an 
estate agent for an average London property 
is almost £1,500-often for little more 
than distributing information to potential 

buyers and handing out keys. The system 

is primitive, anarchic and costly. 

And all the signs are that the difficulties 

will get worse. The most vulnerable part 

of the process is the need for all members 

of a chain of buyer to be able to exchange 

contracts and complete the sales simul


taneously. The difficulty of achieving this 

frequently results in long delays, broken 

deal or risky dependence on bridging

finance . 

Historically, the length of chains ha 

been very hort and this has kept the prob


lem manageable for most people. The 

main reason for this, however, has been 

the high proportion of first time buyers. 

Inevitably this is falling because of the 

larger size and slower growth of the 

owner-occupied sector. The prediction 

must be that chains will lengthen -and 

cause havoc for people buying and selling. 

Local authorities could play an important 
part in developing a cheaper, and les 
hazardous process. A first step would be 
to set up a municipal estate agency service 
on a self-financing (but non-profit making) 
basis. Making full use of computer 
facilities for data processing, such an enterprise 
could surely provide its clients 
with a better service at less cost than the 
typical commercial estate agent. 

This could be extended into 'chainbreaking' 
initiatives, where transactions 
are being held up purely because of the 
difficulties of synchronisation. In effect, 
the local authority would act as a secondhand 
dealer, buying property and then 
re-selling. If the local authority had the 
first option to buy homes put on the market, 
as suggested earlier, this could have a 
double benefit, giving a straightforward 
sale to the vendor and enabling the local 
authority either to let as rented accommodation 
or re-sell, according to local circumstances. 


New municipal or co-operativeservices 

There is a range of further services to 
home owners which local authorities 

27 



could develop, either directly or by a i ting 
the formation of new co-operative . 
The e can not only be valuable in them


e! e , but al o demonstrate a new 
approach in re pon ive public ervice to 
all tenure . 

'Staying put' cheme for elderly owner 
occupier have been ucce fully 
pioneered in everal area . It i clear that 
many older people much prefer to live 
independently in their own home than 
move to heltered hou ing (or live with 
relative ). Thi can be practicable, provided 
appropriate aid and ervice can be 
made available. The e can range from in


tallation of an alarm ystem; phy ical 
adaptation to help mobility; regular 
home help, meal on wheel and other 

ocial ervice upport; and a i tance in 
getting repair and improvement done to 
the hou e. Properly organi ed, thi 
approach can be much more atisfactory 
and le expen ive than special in titutionalised 
provision -but it does requirecomprehen ively co-ordinated, adequately 
funded and per onally ensitive ervice 
. It mu t be the rever e of the pre ent 
Government' "Care in the Community" 
policie , through which people are being 
moved from in titution under the gui e of 
progre ive rhetoric, yet without acce to 
the adequate hou ing, upport and care 
that they need. 

Agency ervice for improvement are 

another po itive initiative, de cribed 

briefly earlier. The e can bee pecially im


portant for the growing number of elder


! owner , but there are many more 

owner-occupier who are intimidated by 

the complexitie of organi ing major im


pro ement to their home . Agency er


ice can advi e on the extent of work 

n eded, recommend ource of finance , 

prepare pecification , ugge t li t of reli


able builder , arrange the contract and 

uper i e the work. 

A well a helping owner , uch er ice · 
should improve the efficiency and alu 
for money of the whole impro ement proces 
. For example, many owner · are 
vulnerable to a bad deal from their builder 
on improvement work, not imp! beeau 
e they are inexperienced, but also beeau 
e the builder know they are unlikely 
to be wanting imilar work for many ear . 
An improvement agency ervice -with 
knowledge of builder ' performance and 
the power to remove from their recommended 
list -ha much more leverage if 
work i being badly done. 

Another initiative could be the forma


tion of municipal or co-operative manage


ment service to tenant or lea eholder in 

private flats. There are ome area of Lon


don with large numbers of man ion flat . 

Repair , cleaning of common parts, 

maintenance and other ervice are u ual


ly organized by managing agent -ome


times appointed by the landlord , ome


time in con ultation with the re ident . 

Yet the standard ofservice from managing 

agents is frequently appalling. Work i 

done badly, complaint are ignored, and 

residents can be faced with udden and 

unjustifiably high ervice charge . 

There i a need for legi lation to entitl 
long lea eholder to acquire collectively 
their freehold and to appoint the managing 
agent . In it elf, however, that would 
not be enough -there is an almo t total 
lack of efficient, re pon ive private firm . 
Local authoritie could them el e deelop 
the e ervice -or preferabl a i t 
the re ident in thee tabli hment of management 
ervice co-operative , democratically 
controlled by the people u ing the 
service . In addition the lea ehold y tern 

hould be entirely aboli hed for elf-

contained hou e . 

28 



7. Financial Fairness for All 
A central argument of this pamphlet is that every member of the community 
should have the right to decent housing, and that to the maximum 
possible degree people should be able to choose between different tenures 
and forms of housing of equal status. This aim cannot be achieved, 
however, if choices are biased by arbitrary and inequitable financial 
arrangements, which give privileges to some households and unfairly 
penalise others. All the evidence shows that the present system of housing 
finance in Britain is acutely inegalitarian, inefficient and divisive. 

A socialist policy on housing finance 
should have three major objectives. First, 
to reduce inequality by progressive forms 
of assistance with housing payments that 
give most benefit to households with the 
lowest incomes and highest housing costs. 
Secondly, to encourage socially desirable 
forms of housing production and maintenance, 
both through the availability of 
capital finance and the distribution of subsidies. 
Thirdly, to ensure parity of treatment 
between tenures. 

Present arrangements totally fail to 
meet these objectives. Most blatant is the 
system of mortgage tax relief to owner-
occupiers, which gives most help to better-
off owners with larger mortgages. As 
Table 3 shows, since 1979/80 the cost of 
mortgage tax relief has risen from £1,450 
million annually to an estimated £3,500 
million in 1984/85. 

Table 3 
Cost of mortgage tax relief 

£million 
1979-80 1,450 
1980-81 1,960 
1981-82 2,050 
1982-83 2,150 
1983-84 2,750 
1984-85 3,500 

Equally significantly, as Table 4 demonstrates, 
relief provides the greatest benefit 
to those who need it least. Whilst the 
200,000 households with a total income of 
between £5,000 and £6,000 receive average 
annual tax relief of £280, the 190,000 

household earning over £30,000 receive 
relief of £1,290 annually. In short, the 
richest owners receive more than four 
times as much subsidy as those with less 
than a fifth of their income. Itis impossible 
to condone such grotesque unfairness. 

Table 4 
Taxpayers receiving mortgage interest relief 
and 
average relief by range of total income 1984-85 


Range of 
total income 
(lower Limit) 

£ 

3,000 
4,000 
5,000 
6,000 
7,000 
8,000 
9,000 
10,000 
12,000 
15,000 
20,000 
30,000 

Numbers 
receiving 
mortgage Average relief 

interest relief per mortgagor 
Thousands £ 
65 130 
130 230 
200 280 
340 375 
410 410 
510 430 
460 430 
1,060 460 
1,130 510 
950 570 
530 820 
190 1,290 

(Source: Parliamentary answer by John 
Moore, Financial Secretary to the Treasury to 
Chris Smith MP, 4 February, 1985.) 

Meanwhile, general subsidies to local authorities 
for housing have been almost 
halved since 1979/80. The total of Exchequer 
and rate fund contributions has been 
cut from £1,561 million in 1979/80 to only 

29 



£813 million estimated for 1984/85. The 
major reasons for this are the sharp rent 
increases demanded by the Government, 
especially between 1980-82, with the 
threat of rate support grant penalties for 
those who refused , and reduced outgoings 
as a result of the cuts in local authority 
house building. Itis true that further large 
sums are paid out to tenants in means-
tested Housing Benefit. However, this is 
better regarded as a part of the income 
maintenance system, as its inclusion in the 
Social Security table of the Public Expenditure 
White Paper now recognises. 
Only the arbitrary exclusion of low-
income home-owners from the scheme 
can make Housing Benefit, misleadingly, 
appear as a subsidy to public sector housmg. 


The overall effect of the subsidy and 
taxation systems, then, is that tenants are 
severely disadvantaged relative to owners. 
This inequality is aggravated by grossly 
unfair rules governing capital expenditure. 
The most serious are the imposition 
of rigid Treasury controls over capital expenditure 
by local authorities, housing 
association and housing co-operatives, 
whilst there are no such constraints over 
capital investment in the private sector. 
As we have already argued, this might be 
justified if the public sector alone was 
heavily subsidised-but now the reverse is 
almost true. The inequity of treatment is 
made still worse by the actual nature of 
Government controls : annual Housing Investment 
Programme allocations to local 
authorities (punctuated by total moratoria) 
which make proper long-term planning 
impossible; tight limits on acquisition of 
existing dwellings, especially by local authorities 
; rigid , Government imposed 
allocations by the Housing Corporation to 
registered hou ing associations and housing 
co-ops; restrictive project control procedures, 
which cause costly, time-
consuming delays and frustrate many of 
the most imaginative schemes. 

The Treasury public spending conventions 
are riddled with still more absurdi


ties. Subsidies to tenants are included with 
the housing programme in the annual 
Public Expenditure White Paper, and subject 
to strict cash limits. Mortgage tax relief, 
in contrast, is identified only in a brief 
annexe summarising the value of various 
tax allowances and reliefs -and is totally 
open-ended. Yet the implications of a rise 
in interest rates which adds several hundred 
million pounds to the cost in lost tax 
revenue of mortgage il)terest relief can be 
much more serious than the 'overspending 
' of local authority housing investment 
that causes the Treasury and Department 
of the Environment such acute 
anxiety. 

There is also a double-counting of local 
authority expenditure which adds further 
distortions. The Public Expenditure 
White Paper fails to distinguish between 
borrowing for capital investment and the 
annual costs of subsidy payable, simply 
adding the two together. The effect is 
similar to telling an individual who has 
taken out a £20,000 mortgage that the first 
year cost is the sum of the total mortgage 
plus one year 's repayments! 

Even these are not the only defects in 
the present system. Since tax relief enables 
people to pay higher prices than they 
could otherwise afford , it also raises the 
level of house prices -ironically making it 
more difficult for people initially to ·become 
owner-occupiers. And it is wasteful, 
because it provides no incentive to the 
maintenance of the housing stock and encourages 
home-buyers to acquire larger 
houses than they need. 

Fundamentally, the present system of 
housing finance is deeply divisive. The tax 
privileges of home ownership have been a 
major factor in making rented housing a 
deeply disadvantaged and subordinate 
form of tenure. Yet within the owner-
occupied sector, those in greatest need of 
financial support -low-income owners 
and first-time buyers -are themselves disadvantaged 
by the regressiveness of the 
tax relief arrangements. 

30 



Astrategy for reform 

It is almost certainly possible to command 
considerable agreement both on the 
objectives of a socialist policy towards 
housing finance and the grave faults of the 
present system. It would be unrealistic, 
however, not to recognise the political difficulties 
of translating these principles into 
practical Labour Party policies. 

A Labour victory at the next election 
cannot be achieved without winning back 
a substantial number of the constituencies 
where a majority of the electorate are now 
owner-occupiers (including a high proportion 
of those who changed from being 
Labour voters in 1979 and 1983). Yet any 
proposals which mean the withdrawal of 
any of the benefits currently enjoyed by 
owner-occupiers-even those already well 
up the ladder -will be perceived as an 
attack on home ownership itself. Conservative 
politicians -and especially Mrs 
Thatcher-will wilfully distort any proposals 
for reform, egged on by the right wing 
media. The recent reaction to Michael 
Meacher 's proposals clearly illustrates 
this. Yet to conclude that these difficulties 
make any reform impossible would be a 
policy of despair. Socialists cannot condone 
the grotesque inequities within and 
between tenures, which disfigure any possibilities 
of genuine housing choice for 
millions of people. We believe that it is 
possible to construct a package of reforms 
, which could be politically attractive 
and meet the aim of greater fairness. 
It must also be remembered that there is 
now considerable support for reform not 
simply from professional housing 
analysts, but from respected economists 
and influential parts of the media. This is 
not meant to imply some guarantee that 
such proposals are correct! It could, 
however, mean that a carefully prepared 
and coherent set of proposals would be 
more likely to receive a sympathetic response 
than many of the policies for 
change put forward by the Party in the 
past. 

The most important factor is how the 
Party presents and campaigns for new 
policies. It is our conviction that if these 
proposals are put forward simply and 
clearly, showing who would benefit and 
what the gains would be, policies for reform 
could be electorally popular -with 
many owner-occupiers as well as tenants. 

There are already some policies for 
change which command widespread support 
and could be swiftly implemented by 
the next Labour Government. 

Housing Benefit 

First, the Housing Benefit system should 
be simplified and extended. The incompetent 
and mean-minded approach of the 
present Government has created wholly 
justified antagonism to the present system, 
and the recent Green Paper 
threatens to make things still worse. The 
crucial principle of reform must be that all 
households receiving Supplementary Benefit 
(or its successor) , or otherwise at or 
below this income level, must have their 
actual housing costs -including rates met 
in full. Otherwise they are being 
forced by their housing circumstances to 
live below the official poverty line. A clear 
implication of this principle is of course 
that Housing Benefit should be fully extended 
to owner-occupiers. 

New mortgage arrangements 

Secondly, there are opportunities for innovations 
in mortgage lending, which 
would particularly help first-time buyers. 
The index-linking of mortgages would reduce 
payments in the early years by 
spreading the costs evenly in real terms 
over the life of the mortgage. Some 
schemes of this kind already exist, 
although the take-up to date has been disappointing. 
One explanation for this is the 
failure to promote them energetically and 
imaginatively. If the advantages were 
stressed, particularly for groups such as 
households with young children dependent 
on a single wage, the take-up would 
improve. Building societies might also be 

31 



encouraged to fund this through a new 
index-linked savings scheme, which could 
be attractive for people retiring with a 
fixed sum of capital. 

The abolition of stamp duty on the 
purchase of domestic property would 
make it easier for people moving home. 
Stamp duty is an irrational and unpopular 
tax, which effectively penalises mobility. 
It can be argued that it is a form of tax on 
the capital gains realised by people 'trading 
up ', but it would be more sensible to 
achieve this directly. 

Reform of public sector subsidies 

Thirdly, new arrangements are needed for 
public sector tenants. The key principles 
are that local authorities should have freedom 
to set their own rents, but with equity 
between authorities secured by some redistribution 
of resources ; that the level of 
subsidies should ensure broad parity of 
treatment with owner-occupiers ; and that 
housing production should be encouraged 
by specific investment subsidies and the 
removal of the disincentives caused by 
sharply rising debt repayments on new 
capital spending. 
The most effective ways of achieving these 
objectives would be through a system of 
national rent pooling and deficit subsidies 
to local authorities. The authorities with 
the most severe problems and high Housing 
Revenue Account (HRA) deficits 
would receive the greatest subsidy, and 
this would increase to offset the costs of 
further housing investment. The HRA itself 
needs reform to exclude those costs 
(such as estate lighting or services to 
homeless households) which should be 
borne by the community as a whole, not 
by tenants alone. 

The setting of individual rents should be 
decided by local authorities, but theyshould be encouraged to do this in ways 
which are consistent with the extension of 
choice. There has been a tradition of 'flat' 
differentials in council housing. While this 
may sound egalitarian, it must mean that 
the occupants of the worst housing are 

paying too much in order to subsidise 
those in the best housing -and it also 
means that the whole weight of responsibility 
for housing allocation is placed on 
the council bureaucracy, with no assistance 
from market signals of consumer preferences. 


Removing constraints on capitalinvestment 

Finally, the principle ·of parity between 
tenures clearly means that there should be 
no more limits on the freedom of local 
councils, housing associations and co-ops 
to provide' homes for rent than there are 
on private builders to provide homes for 
sale. The Public Sector Borrowing Requirement 
should be of no greater concern 
than the borrowing requirement of the 
economy as a whole. 

Central Government controls on local 
authority housing investment should 
therefore be abolished. Local councils 
should be free to plan their housing programmes 
to meet the unmet demand in 
their local area-without the constraints of 
Department of the Environment allocations 
and project control procedures. The 
only controls should be positive -the requirement 
to implement statutory obligations 
on the provision of housing, to satisfy 
minimum standards, and to produce 
annually a comprehensive assessment of 
local housing needs. 

Options for wider reform 

All of the measures just outlined are important 
; but none go to the heart of the 
major inequities with which we began this 
chapter. Social policy specialists have 
been debating the best way to tackle these 
for many years , but as yet without 
reaching a consensus -not least because of 
the acute political difficulties. 

Those approaching the debate from a 
social security perspective have often 
been attracted to some form of universal 
housing allowance (UHA) -a cash benefit 
for housing costs in whatever tenure, inte


32 



grated into the wider income maintenance 
system. The argument that hou ing finance 
hould be tackled within the overall 
context of the tax/ benefit y tern undoubtedly 
ha great appeal, and we welcome 
the attention given to hou ing in 
Michael Meacher's recently announced 
social ecurity proposal . However, we 
believe ome note of caution must al o be 
sounded. Fir t, the call for integrated reform 
can turn into a recipe for talemate, 

ince the problem of imultaneou reform 
in hou ing finance , ocial ecurity 
and taxation threaten to become intellectually 
and politically unmanageable. 
Second, no-one has yet designed a UHA 
scheme which i les than formidably expensive, 
preci ely becau e it i a univer al 
benefit targeted -unlike, ay, child benefit 
-on virtually the entire population. 
Third, no direct stimulu i given by thi 
form of sub idy to hou ing production. If 
UHAs are to be seriously con idered, the 
urgent need now is for concrete proposals 
which meet these difficultie . 

Often linked to the UHA idea have 
been proposals for some form of housing 
wealth tax. Intellectually there i a formidable 
case for taxing both the wealth represented 
by owner-occupied housing income 
in kind -'imputed rental income' which 
owner-occupiers derive from their 
ownership. Whether this took the form of 
annual housing wealth tax or something 
more like the old 'Schedule A ' income 
tax, however, we have concluded that 
such approaches are not politically viable, 
at least in the short to medium term. They 
would be inevitably and damagingly 
branded as an attack on home owner hip 
itself. 

In the renewed debate which will now 
ensue from Michael Meacher's proposals, 
the Fowler Reviews and the report of the 

Duke of Edinburgh 's Briti h Hou ing Inquiry, 
therefore, we believe it i important 
that more organic form of change are al o 
con idered. 

Taxation and ub idie in the owner-
occupied sector are clearly the critical 
problem area . Failing a UHA or a comprehensive 
tax reform , there i still much 
that could be done. 

In relation to mortgage tax relief 
(MTR) , the mo t urgent reform i to end 
relief at the higher tax rate . Beyond this, 
it would be po ible progre ively to reduce 
the ba ic rate of ub idy from it 
pre ent 30 per cent. Thi i admini tratively 
ea y, now that MTR i paid direct to the 
lender rather than via per onal tax codes, 
and could proceed in parallel with falling 
real intere t rates a Labour moved to an 
ex pan ionary economic policy. Such an 
approach could al o accommodate differential 
ubsidie for hou ehold in different 
circum tances -for example, retaining 
or even increa ing the pre ent ubsidy 
rate for fir t-time buyers. By restructuring 
tax relief, not uniformly reducing it, 
Labour could eize the political initiative. 

Capital taxation i more difficult. There 
is clearly a ea e for impo ing capital gain 
tax on hou e ales on the ame ba i as 
now applie to other as et -i.e. taxing 
real gain , over and above general inflation. 
But ellers are of course al o buyer . 
A more acceptable approach could be to 
claw back such gains at the end of an own-

er's 'career' in owner-occupied hou ing, 


perhaps through ome form of upplement 
to capital tran fer tax. There are 
strong arguments for more ambitious and 
comprehensive reforms, but they will 
require considerable work to refine and 
promote. In the meantime it is important 
that the best is not allowed to become the 
enemy of the good . 

33 



8. Summary 
Over the past decade the Tories have been allowed to seize the initiative 
on housing policy. Their housing record itself is sectarian and shallow extending 
home ownership only for a minority of better-off tenant~, 
whilst providing no answers to the difficulties faced by tenants in unsatis .. 
factory conditions, by many low income owners and by all those unable to 
find a home of any kind. Yet through their policies on council house sales, 
they have successfully presented themselves as the champions of freedom 
and choice. Labour's arguments against the 'right to buy' have been, in 
policy terms, very defensible-but the stance has been widely seen as 
opposition not only to home ownership itself, but still more fundamentally 
to the right of people to choose how they will live. 

To under tand how thi happened , it is 
nece ary to look at hi torical changes in 
Britain' hou ing y tern . In the po t-war 
year council hou ing offered an attractive 
alternative to private renting -and for 
million of people broke the link between 
low income and grossly inadequate hou ing. 
The compari on today, however, i 
no longer with the withering private 
rented ector, but with owner-occupation. 
And by the 1970 public rented hou ing 
had been firmly labelled a the hou ing 
ector which offered little choice -over 
where you lived, how many room you 
had, what colour you could paint the front 
door. Thi decline into a tigmati ed 

econd be t ector wa reinforced by deep 
inequitie in hou ing finance, which the 
Labour Party ha never effectively challenged. 


The argument again t council hou e 
ale -from the tandpoint of tho e who 
ma benefit -are undermined within an 

erall hou ing y tern -of inve tment, 
right and ub idy-which i gro ly bia ed 
in fa our of home owner . The failure to 
tackle thi fundamental contradiction left 
th Lab ur Party ulnerable to the Tory' 
p litical a ault. 

Th chall ng n w i to de elop a rep 
n e which i both principled and p pu1 
r t th chang d h u ing c ndition and 

social realitie of the 1980 . We need a 
commitment to ,real equality in hou ing, 
and an acceptance that the tate of the 
nation's hou ing i a matter of public respon 
ibility. But a home is also omething 
very per onal, and it i important to 
approach it in a strongly libertarian pirit, 

eeking to advance individual right 
throughout the hou ing ystem. 

* * * * 

Owner-occupied housing i e entially 
available on demand. In contra t public 
rented hou ing i rationed -allocated 
according to local authority deci ion on 
which applicant are most 'de erving' or 
by limited tatutory obligation . The 
treatment of homele people i characteri 
ed more by the etho of the Poor Law, 
than the entitlement to social right of a 
civili ed democracy, and it reinforce fal e 
di tinction between waiting li t applicant 
and tho e who are homele . 

The way forward mu t be through a new 
approach which e tablishe a legal right t 
hou ing for all member of the community. 
Thi mu t include an effecti e 'right t 
rent', which aim to make rented h u ing 
a ailable on demand. Within the cont xt 

fa u tained pr gramme of in e tment 
and a right to rent' , we believe Labour i 
ju tified m upp rting a 'right t buy' f r 

34 



public sector tenants-providing there is a 
duty to replace home old wherever there 
i an unmet demand and that sales are not 
on the unfair term of the pre ent discount 
. 

* * * * 

Through the 1970 the belief became 
wide pread that the real hou ing problems 
in Britain were almo t solved. Thi complacency 
wa never j u tified, even by the 
conventional measure of hou ing tre , 
but the avage cuts imposed by the Conservative 
Government have made hou ing 
condition far wor e. There are now over 
two million dwellings in England alone 
that are unfit, lacking basic amenities or in 
a seriou tate of disrepair. There are large 
number of council dwelling , including 
many built within the last 20 year , that 
need urgent remedial action. Even on traditional 
a umption there i a hortage of 
500,000 home , and thi ignore the 'concealed' 
demand especially from the growing 
number of single people wanting to 
live independently. 

There are three major prioritie for inve 
tment. Firstly, action i urgently 
needed to tackle the problem of unfitne s 
and di repair in the private sector. 
Secondly, remedial action is needed to 
moderni e older council property and to 
put right the major defects on post-war 
estates. Thirdly, a programme of new 
house building is needed, especially of 
rented hou e , and including a wider diversity 
of provision than in the pa t. 

Despite the urgency of the demand, 
priority must be given to building homes 
of good quality. Past experience shows 
only too clearly the folly of sacrificing 
standards to short-term expediency. The 
most effective way of expanding the supply 
of rented homes quickly i through acquisitions 
of good quality vacant homes 
from the private sector. 

* * * * 

There is a strong decentralist tradition 
in socialist thought and Labour must show 
that it is genuinely prepared to devolve 

power, and trust people to make choices 
for them elves. Public housing must be 
re-haped a a ervice responding to the 
expectation of tho e who live in it. The 
key principle are that tenant should be 
encouraged to take re ponsibility for a 
much control of the running of their 
homes a they wish; the day-to-day service 
must be the responsibility of known 
and acce sible individual , based at estate 
level; and decisions mu t be devolved to 
the mo t local level practicable. 

In addition, action i needed to strengthen 
individual rights in ways which give 
real control , foster equality between landlord 
and tenant, and extend greater choice 
to tenant over where they live. The privately 
rented ector cannot offer atisfactory 
and ecure home and the objective 
of policy must be it transfer into socially 
rented housing or owner occupation. In 
the short term the protection given to 
tenants against eviction and their ability to 
enforce adequate standards must ~e 
strengthened. 

* * * * 

Not all home owners are well-off and 
well-housed. The policies which have 
brought rich political dividend to the 
Con ervatives can no longer sustain the 
same rate of growth of home ownership 
nor solve the difficulties that many owners 
face. If the Labour Party can develop 
effective policies on these issues there is 
the opportunity to recover lost political 
ground. 

Greater public intervention is needed in 
the production of homes for sale. Better 
arrangements for buying and selling 
homes would greatly a sist owners moving 
home. And there is considerable scope for 
new municipal or cooperative services for 
example, through agency improvement 
schemes or as management agents to 
private tenants or leaseholders. 

* * * * 
The present system of housing finance 
in Britain is acutely inegalitarian, inefficient 
and divisive. A socialist policy 

35 



mu t have three major objective : to reduce 
inequality by progressive form of 
a istance with hou ing costs, to encourage 
socially de irable form of hou ing 
production and to ensure parity of treatment 
between tenure . 

De pite the difficulties we believe that it 
is possible to construct a package of reforms 
which can be politically attractive 
and meet the aim of greater fairness. Immediate 
teps towards this goal can be 
taken by the exten ion of Housing Benefit 
to meet the costs of low income owners, 
extending the availability of index-linked 
mortgages, reforms to public sector sub


idies and the removal of centralised controls 
over local authority hou ing investment. 


More fundamental reforms are needed 
to achieve real fairnes in housing finance. 
There is much to be said in principle for 
integrating upport for housing into the 
tax/benefit ystem through some form of 
univer al housing allowance, perhaps 
allied to a housing wealth tax. But there 
are major practical and political difficultie 
, and more organic reform to the present 
mortgage tax relief and capital taxation 
arrangements are also a serious option. 


* * * * 

The core of our argument i that the 
Labour Party can e pouse hou ing policies 
which are fair, practical and popular. 
They mu t be based on a powerful determination 
to tackle the acute housing dif


ficulties experienced by million of people 
in this country. The fundamental principle 
i that every member of the community 
ha the right to afe, secure and atisfactory 
housing, with the opportunity to 
choose between different tenure of equal 

tatu . Thi cannot be achieved by reliance 
on market force , but requires po itive 
intervention by government, local atithoritie 
and socially re pon ible agencie 
to increase housing production, enforce 
legal rights and organise responsive hou ing 
services. The objective of intervention, 
however, is not to increase the power 
of the State, but to extend the opportunities 
for individual and groups to exerci e 
choice and control. 

Trapped within an outdated analysi 
and ideology, the Labour Party has failed 
to expose the hypocrisy of the Tory claim 
to be extending freedom and choice. A a 
result the real issue have been neglected. 
Hou ing has slipped down the political 
agenda. More and more people have been 
seduced by Tory propaganda. 

It i our belief that thi retreat can be 
dramatically reversed. A campaign for decent 
homes for everyone, at a co t they 
can afford , should be a central pillar of a 

ociali t programme -a ba ic human 
right, an attack on intolerable poverty and 
exploitation, a mean of creating ocially 
useful jobs. It i a campaign that every 
member of the Party -from ordinary 
activi t to MP -hould be able to up-
port with confidence and conviction. 

36 



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A New Housing Policy for Labour 

This pamphlet has been written at the same time as the Labour Party 
comes forward with its own new housing policy statement "Better Homes 
for the Future". Both deal in part with Labour's response to the right of 
council tenants to buy the home they live in. 

But there is a danger that the debate will be dominated by this single 
narrow issue. Ifso, it will take place on ground chosen by the Conservatives. 
In this pamphlet the attempt is made to place the issue in a much 
broader context. 

Whether people rent or buy, the authors argue, poses no issue of 
principle for socialists. The central objective for Labour should be the 
widest possible extension of choice in housing -underpinned by an 
ambitious programme to achieve justice between the different forms of 
tenure in order to make choice a reality. These aims offer the basis for a 
Labour response to the changed housing conditions of the 1980s which is 
both principled and popular. 

A major theme of the pamphlet is the need to develop an effective 
'right to rent'. This demands a sustained programme of public housing 
investment which aims to make rented housing available on demand , 
backed by a legal framework gu~ranteeing a right to housing for all 
members of the community. 

We need a commitment to real equality in housing, and an acceptance 
that the state of the nation's housing is a matter of public responsibility. 
H0wever, a home is also something very personal, and it is important to 
approa.ch it in a strongly libertarian spirit, seeking to advance individual 
rights in all tenures. 

Finally, the pamphlet argues, genuine choices in housing cannot be 
achieved without radical reforms to the acutely inegalitarian and divisive 
system of housing finance. It sets out the objectives of reform and some 
immediate steps towards fairer arrangements, whilst recognising that 
comprehensive changes need to be considered within the wider context of 
taxation and social security reform. 

Fabian Society 

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ineligible for membership of the Labour Party is eligible for full membership; 
others may become associate members. For membership and 
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